Roy Morgan Research’s Business Confidence survey in November 2014 increased by 8.1 points (up 7.0%) from October (to 123.0), the highest level since January 2014 and above the four year average of 118.2. Business confidence has shown considerable volatility over the last 12 months and is currently only 13.3 points (9.8%) below the peak of 136.3 in October 2013 following the election of the new government. These November figures are the result of 1,099 interviews with all types of businesses across Australia.
The increase in business confidence was across all components of the index but was focused mainly on a more optimistic outlook for the Australian economy over the next 12 months and the opportunities this would provide to invest in business expansion.
Monthly Business Confidence -- Australia
Source: Roy Morgan Single Source (Australia), December 2010 – November 2014. Approximate average monthly sample last 12 months, n = 1000
Norman Morris, Industry Communications Director, Roy Morgan Research, says:
“The improvement in business confidence in November was due largely to a big increase in the feeling that the next 12 months would be a good time to invest in business expansion. Economic growth depends to a large extent on increased business investment and in November the proportion of businesses considering that the next 12 months would be a good time to invest in growing their business increased to 62%, which was the highest level since January and well up on pre-federal election levels of 55% in July 2013 and 56% in August.
“Confidence in the key areas of retail, construction and manufacturing, which it is hoped will make up for a slowdown in mining investment and iron ore prices, are showing some tentative signs of an improvement in outlook but are very unlikely to cover the impact of the mining downturn. Manufacturing, despite some small improvement, remains below average in confidence (with 108.9) but construction (127.0) and retail (126.1) are both narrowly above average and are showing some positive signs.
“Business confidence across states is fairly even except for South Australia which continues to lag.
“The RBA statement on the economy during the month remained cautious and although expecting moderate growth, the decline in investment in the mining sector was seen as an issue with the potential to negatively impact on growth to place it a little below trend.
“Unemployment remains a major problem with the Roy Morgan unemployment level in November reaching 10.0% which was up from 9.1% in October. In addition to this, November was not a good month for the ASX which fell 3.9% points, and the survey was conducted before the poor growth figures were released by the ABS last week.
“Despite these negative factors, business is showing an improved level of confidence to the extent that it is now well above the ANZ Roy Morgan Consumer Confidence index that finished the month on 113.9 compared to business with 123.0. The movements in both business and consumer confidence are likely to remain volatile with world social, political and economic events, as well as uncertainty regarding the Australian economy, likely to impact at any time.
“A challenge for banks continues to be how to improve the satisfaction among their business customers which still lags well behind that of their personal customers. This highlights the need for an increased focus on meeting the needs of business customers if they are to be retained and attracted when business demand for finance eventually picks up.”
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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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