In the three months to May 2014, the business customers of Westpac had the highest confidence level of the Big Four with 128.3, followed by the ANZ (121.4), CBA (113.6) and NAB (108.8). These are the latest findings from the Roy Morgan Research Business Survey of approximately 13,000 businesses per annum.
Westpac’s score of 128.3 was well above the overall business confidence average of 118.6 for the three months to May 2014. The main reason for this strong performance was to do with their business customers’ very positive feeling regarding economic conditions in Australia over the next 12 months and five years.
The ANZ also performed above average with 121.4 due to their business customers scoring the highest of the Big Four for feeling that their financial position was better than 12 months ago and the next 12 months would be a good time to invest in growing the business.
Bank Business Customers’ Confidence
Source: Roy Morgan Business Survey (Australia), March 2014 – May 2014 (n=2,309).
The lower levels of confidence for the CBA and NAB customers were to do with their less optimistic belief that they were now better off financially than last year and the fact that were not so positive about the economic outlook . As a result they were less likely to think that the next 12 months would be a good time to invest in growing the business.
An important impact of low business confidence is reduced business borrowing. The likelihood of borrowing in this case is measured by how businesses feel about the next 12 months, and whether they regard it to be ‘a good time to invest in growing the business.’
The most positive groups of business customers regarding the next 12 months to be a good time to invest in their business are customers of the ANZ (57.8% agree it is a good time) and Westpac (57.6% agree). The CBA was below average with 53.3 % and the NAB was the lowest of the Big Four with 49.3%.
Next 12 months a good time to invest in growing the business
Source: Roy Morgan Research Business Survey, March 2014 - May 2014, n = 2,309
Norman Morris, Industry Communications Director, Roy Morgan Research, says:
“Business confidence has much more relevance for financial institutions when measured at the individual bank customer level rather than one measure for the overall economy. Ultimately, how each bank’s customers feel about the economy and the associated outlook for their business will be the best indicator of banks’ likely lending prospects.
“The analysis in this release shows that the business customers of the CBA and NAB have a less positive outlook on the economy and their business, and as a result appear to be less likely to invest or borrow for business growth in the next twelve months. On the other hand, Westpac and ANZ customers have a much more positive outlook and as such are more likely to invest in growing their business over the next year.”
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