Roy Morgan Business Confidence has lifted by 6.2 points to 101.3 in August 2024, reportedly due to increasing confidence from businesses about the performance of the Australian economy.
The boost to Business Confidence came after the Stage 3 tax cuts were introduced for income taxpayers in July and the latest inflation figure dropped to 3.5 per cent.
Despite the bump up overall, retail confidence has fallen into the bottom five industries reporting the lowest confidence.
The five least confident industries are led by Transport, Postal & Warehousing on 80.2, down 2.3 points on a year ago, and Wholesale on 81.1 and down 10.3 points on a year ago.
According to Roy Morgan, the Transport, Postal & Warehousing industry has been among the least confident industries since Summer began and is the only industry for which confidence has averaged under 80 throughout the eight months so far this year.
In third last place is Agriculture which has had low Business Confidence for longer than any other and is now at 82.8, but still up 7.1 pts from a year ago.
Accommodation & Food Services is the only other industry with Business Confidence below the level of 90 at 86.8, and down a large 34.7pts on a year ago – the largest decline of any industry over the last year.
As for retail, the industry is reporting a confidence score of 90.7, which is up from its score two months ago, where it was then at 89.3.
Meanwhile, Mining, Electricity, Gas & Water, Information, Media & Telecommunications, and Education & Training are the four most confident industries during July and August 2024, driving the overall score across all industries.
In August, businesses also grew more confident about their own performance over the next year and now 46.2 per cent (up 7.4ppts) expect to be ‘better off’ financially this time next year compared to only 19.7 per cent (down 0.9ppts) expecting to be ‘worse off’ – the lowest figure for this indicator for well over two years since February 2022.
A majority of 56.4 per cent (up 7.1ppts) of businesses expect there will be ‘good times’ for the Australian economy over the next year compared to only 41.7 per cent (down 7ppts) that expect ‘bad times’ – the biggest net positive margin for this indicator for well over two years since February 2022.
Looking longer-term, businesses are still generally pessimistic according to Roy Morgan, although there were positive moves in August. A majority of 56.2 per cent (down 4.7ppts) expect ‘bad times’ for the economy over the next five years compared to 29.1 per cent (up 1.5ppts) that expect ‘good times’.
In addition, 40.5 per cent (up 1.5ppts) say the next 12 months is a ‘good time to invest in growing the business’ compared to 37.7 per cent (down 2.4ppts) that say it is a ‘bad time to invest in growing the business.
Business Confidence is now 9.9 points below the long-term average of 111.2, but a large 19 points higher than the latest ANZ-Roy Morgan Consumer Confidence of 82.3 for September 2-8, 2024.
“There was further good news for businesses in August with the official ABS monthly inflation figures for July showing annual inflation dropping to 3.5% (down 0.3% points from June). If annual inflation continues to fall at that rate it will be within the RBA’s target range of 2-3% by the end of this month,” Roy Morgan CEO Michele Levine said.
“On a State-by-State basis Business Confidence is in positive territory in four States in August – the first time since January 2023 since this many States had Business Confidence above 100.
“These four States include South Australia (104.0), Victoria (103.8), Queensland (102.0) and New South Wales (101.8), while the indicator is in negative territory below 100 in Western Australia (98.4) and Tasmania (84.9).”