Roy Morgan Research’s latest Business Confidence survey in November 2013 is showing some signs of weakening following strong gains in September and October after the Federal election. The level of 131.1, while still well above the average of the last three years, was down from the October figure of 136.3 and the September results of 134.3. These November figures are the results of 1,624 interviews across all industries, business sizes and locations across Australia.
The drop in confidence among business in November was caused by a decline in positive feelings about where the economy is heading in the next 12 months and the next five years. There has also been a small drop in the proportion of businesses considering that the next 12 months are a good time to invest in growing the business.
This decline in Business Confidence in November was across all business sizes, with micro business down 5.4 points to 129.4, small business down 4.4 points to 143.3 and medium/large business down 3.4 points to 146.9. Medium/large businesses (turnover $5m+ p.a.) have clearly been the most confident over the last three years and in November, despite a small drop off in confidence, they remain at an historically high level.
All states have suffered some loss in business confidence during November, with the biggest losses being in WA and SA. The most positive is Queensland, currently on 136.4, followed by NSW (134.0). The states with below average business confidence are Tasmania (124.5), WA (125.6), Victoria (126.4) and SA (131.0).
Of the major industries, Mining still leads confidence in November with 149.7 (down from 156.4 in October), Retail is around average with 131.6 (up from 126.8 in October) and Construction is on 127.9 (up from 122.9 in October). The agricultural sector remains well below average with 121.9 but was up slightly on the 118.7 recorded in October.
Norman Morris, Industry Communications Director, Roy Morgan Research, says:
"The decline in business confidence in November following the highs in the previous two months created by the Federal election was probably to be expected to some extent as market realities hit, but a number of events have combined to increase this uncertainty.
“The November result was most likely impacted by the extensive press coverage of the budgetary situation and the need to lift the debt ceiling by two hundred billion dollars, which appears to have been a complete turn-around from the picture that was presented prior to the election. The issues surrounding the Gonski school funding also created uncertainty and confusion around what the Government was likely to change next.
“Other events that are likely to have cocontributed to a more negative outlook for business included the spying controversy regarding Indonesia, problems in the car manufacturing industry and forecasts that the growth in the Australian economy was slowing. The decline in the Australian dollar was obviously a positive for exporters but would also have had a negative impact on the import of goods.
“During November the ASX 200 declined by 2 percentage points, which was obviously a reflection of some negative feelings regarding the Australian economy.
“Despite these negative impacts, the level of business confidence in Australia remains above the average seen over the last three years but it has shown itself to be very sensitive to any local or overseas events which are difficult to predict.”
For comments or more information please contact:
Norman Morris, Industry Communications Director
Telephone: +61 (3) 9224 5172
Mobile: +61 402 014 474
Email: [email protected]
Roy Morgan Research
Roy Morgan Research is the largest independent Australian research company, with offices in each state of Australia, as well as in New Zealand, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan Research has over 70 years’ experience in collecting objective, independent information on consumers.
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