Tuesday, September 10th, 2013 - Roy Morgan Research
Roy Morgan Research’s Business Confidence survey in August showed an increase for the second consecutive month following four months of decline. The August result of 119.6 was up on the July figure of 117.3 and represents a positive sign for economic recovery in Australia. These results are from 3,188 interviews with business decision makers across Australia conducted in August in the lead up to the Federal Election, which was likely to be having a positive impact on business sentiment. Roy Morgan Research is in the unique position of being able to analyse the results of the business confidence survey to a much greater depth due to the very large sample of over 30,000 businesses per annum.

The August improvement in Business Confidence was due to an increase in the number of businesses reporting that they were feeling positive about economic conditions in Australia over the next 12 months; which has gone up to 65% in August from 62% in July. This improvement in economic outlook for the next 12 months has obviously impacted positively on business investment intentions with 56% now considering that the next 12 months would be a good time “to invest in growing the business”, the highest level since March 2013.

Improvement in business confidence in August was seen in New South Wales, Queensland and Tasmania. The downturn in the mining industry is obviously having an impact on business sentiment in WA which continues to fall back to around average after having been well ahead for some time.

The most positive industry is “Education and Training” (134.2) followed by “Finance and Insurance” (130.5) and “Renting, Hiring and Real Estate Services” (128.9). Confidence in the “Manufacturing” sector remains below average (111.2) but shows some signs of improvement. The “Construction” industry has shown no improvement and still remains below average (105.5); as a result it is unlikely to make up for the contraction in the mining industry that is hoped for. The high profile “Retail” sector confidence remains a little below average and has declined to the lowest level in 2013, remaining a major concern.

Source: Business Confidence, Roy Morgan Business Single Source, average monthly sample n = 2,235.

Norman Morris, Industry Communications Director, Roy Morgan Research, says:

“Business confidence in Australia has improved for the second consecutive month due to a number of positive factors impacting on business in Australia. These include an increase of 6.9% in the ASX 200 over the last two months, the decline in the cash rate by the RBA, the end of the government wrangling with the electing of Kevin Rudd as PM then followed by the likely prospect of a change in government leading up to the election and the subsequent abolition of the carbon tax. The decline in the value of Australian dollar and its steady value was also a positive factor for many industries. On the negative side there was still concern over the global economy and the China slowdown.

“Early indications for the likely movement in business confidence in September can be seen in the positive uplift in the Roy Morgan Consumer Confidence survey for the fourth consecutive week, ending the first week of September at 120.9. We have seen that the business and consumer confidence measures move together and so this is likely to begin September on a positive note for business. The election of a new government is also likely to reinforce this positive trend in confidence in September.”
Source: Business Confidence, Roy Morgan Business Single Source, average monthly sample n = 2,235.

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Roy Morgan Research is Australia’s best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
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