Roy Morgan Business Confidence fell by 2.3 points to 97.0 in May 2024, and is still below the neutral level of 100.
The results come amid the release of Australia’s Federal Budget, with Roy Morgan CEO Michele Levine saying that businesses were not impressed with Treasurer Jim Chalmers’ Federal Budget.
“This should not be a surprise as a look at historical trends shows business confidence has now declined in 9 of the 14 years in May following the Federal Budget,” she said.
There were mixed results in May with businesses less confident about the next 12 months and whether it would be a ‘good time’ to invest in the business while at the same time there was more confidence (albeit at a low level) about the longer-term outlook for the Australian economy over the next five years.
Now 42.6 per cent of businesses (up 6.1ppts) say the next 12 months is a ‘bad time to invest in growing the business’ compared to only 38 per cent (down 3ppts) that say it is a ‘good time to invest’ – the lowest figure for this indicator for over four years since April 2020.
There was a recovery in sentiment regarding the Australian economy over the longer-term with 32.4 per cent of businesses - up 3.1ppts from a record low in April - expecting ‘good times’ for the Australian economy over the next five years while 55.2 per cent (down 5.3ppts) expect ‘bad times’.
Business Confidence is now 14.2pts below the long-term average of 111.2, but 16.7pts higher than the latest ANZ-Roy Morgan Consumer Confidence of 80.3 for June 10-16, 2024.
Retail is the fourth-least confident sector, with a score of 86.0, just ahead of Mining (85.6), agriculture (85.0) and transport postal and warehousing (74.0).
On a state-by-state basis, business confidence is in positive territory in only two states - Western Australia (110.2) and South Australia (101.6). It is in negative territory in the four other states, led by Tasmania (82.3), Victoria (90.5), New South Wales (98.1) and Queensland (98.5).
“At an industry level, it is professional, scientific and technical services which is the most confident industry in the months of April-May with a business xonfidence rating of 113.8, ahead of second-placed education and training (113.0) and third-placed finance and insurance (110.9),” Levine said.
“Also performing well are information media and telecommunications on 109.5, administration and support services on 107.8, property and business services on 102.9, community services on 102.6, public administration and defence on 101.6 and wholesale just above the neutral level of 100 at 101.3.”