Roy Morgan Business Confidence has jumped by 12.4 points to 106.7 in October 2024 compared to the prior month.
This comes as monthly inflation dropped from 3.5 per cent in July to 2.7 per cent in August and has now fallen to only 2.1 per cent in September, according to data from the Australian Bureau of Statistics (ABS)
The official ABS quarterly inflation for September 2024 - which was announced in late October - dropped to 2.8 per cent, the lowest for well over three years since March 2021.
Business confidence has now improved to its most positive rating for well over two years since April 2022, Roy Morgan reported, and is the highest it has been since the Albanese Government was elected in May 2022.
Businesses became more confident about 2025 in October as inflation dropped rapidly and returned to the Reserve Bank of Australia’s target range of 2-3 per cent.
Now, 46.3 per cent (up 5.2 percentage pointsa) of businesses expect to be ‘better off’ financially this time next year and a clear majority of 59 per cent (up 6.8ppts) expect Australia will have ‘good times’ economically over the next 12 months.
The biggest driver of the positive move in business confidence related to investing in the growth of the business with 42.9 per cent (up 6.9ppts) saying the next 12 months is a ‘good time to invest in growing the business’ compared to only 35.2 per cent (down 10.4ppts) that say the next 12 months is a ‘bad time to invest in growing the business’ – a net positive movement of 17.3ppts.
Business confidence is now 4.5 points below the long-term average of 111.2, but a large 20.2pts higher than the latest ANZ-Roy Morgan Consumer Confidence of 86.7 for November 4-10, 2024.
There has also been a stark improvement for both retail and wholesale industries, with both recording relative positivity following recent lows. Both industries equally hold a confidence score of 101.9, with retail up from 92.7 in September and wholesale up from 93.8.
The most confident industry in September and October 2024 was public administration and defence on 160.1, up a massive 48.9pts on a year ago, followed by education and training on 127.3, up 6.7pts. Education and training has now been amongst the top five most confident industries for over two years since June 2022.
The five least confident industries are led by transport, postal and warehousing on 72.6 and in line with the average for the industry so far this year of only 72.4 – more than 10pts lower than any other industry.
This is followed by mining on 78.3, agriculture on 85.7, information, media and telecommunications at 95.8 while the construction industry is at 98.3, just below the neutral level of 100.
“The rapid reduction in inflation in recent months is building expectations amongst many, including businesses, that the Reserve Bank will soon be embarking on a new cycle of interest rate cuts – as their central bank counterparts overseas have already begun,” Roy Morgan CEO Michele Levine said.
“On a state-by-state basis, business confidence is now in positive territory in five states including New South Wales (111.6), Queensland (105.7), Western Australia (105.2), Victoria (104.4) and South Australia (102.4). The indicator is now in negative territory below 100 in only Tasmania (89.0).”