The Roy Morgan Business Confidence index was 95.1 in July 2024, up 3.6 points from a month ago and up 7.6 points from the same month last year. It comes after Stage 3 income tax cuts to consumers boosted the spending power of millions of Australian taxpayers, according to the Australian research firm.
There were mixed results in July, with businesses more confident about the outlook for the Australian economy over the next few years but less confident about their own prospects over the next year.
A large plurality of businesses (49.3 per cent - up 3.8ppts) say they expect ‘good times’ for the Australian economy over the next year and 27.6 per cent (up 1.6ppts) expect ‘good times’ for the economy over the next five years.
In addition, 39 per cent (up 2.9ppts) say the next 12 months is a ‘good time to invest in growing the business’ while a virtually unchanged 40.1 per cent (down 0.6ppts) say it is a ‘bad time to invest in growing the business’.
Although businesses are less confident about their own prospects over the next year, the indicator remains the most positive of those measured, with 38.8 per cent (down 5.1ppts) expecting they will be ‘better off’ financially this time next year compared to only 20.6 per cent (down 4.6ppts) expecting to be ‘worse off’.
Business confidence is now 16.1 points below the long-term average of 111.2, but 11.2pts higher than the latest ANZ-Roy Morgan Consumer Confidence of 83.9 for August 5-11, 2024.
Despite the improvement, Roy Morgan CEO Michele Levine said business confidence has now been below the neutral level of 100 for five straight months since February 2024.
“The biggest driver of the increase in July related to businesses views on the prospects for the Australian economy over the next year and next five years,” Levine said.
“On a State-by-State basis, business confidence is in positive territory in only two States, Western Australia (105.2) and Tasmania (100.8) while the indicator is in negative territory below 100 in the other four States of South Australia (99.8), Queensland (94.7), New South Wales (94.4) and Victoria (91.7).”
Across the industries, mining is the most confident industry in the months of June and July with a business confidence rating of 139.5 ahead of second-placed information, media & telecommunications (115.0), electricity, gas & water (113.7) and finance & insurance (110.9).
“Also performing well are education & training on 108.0, professional, scientific & technical services on 105.1, accommodation & food services on 102.2 and recreation & personal on 101.5,” Levine said.
“At the other end of the scale are several industries with low business confidence led by wholesale on only 76.4, transport, postal & warehousing on 78.0 and agriculture on 79.3. Business confidence in agriculture has now been below the neutral level of 100 for 22 months and averaged only 82.2.”
Other industries with low business confidence are public administration & defence on 81.4, down 14.9pts on a year ago, and construction on 86.7, up 3pts on a year ago. Both industries have had low business confidence in recent years and have averaged below 100 since the start of 2022.