Business confidence in Australia fell for the third consecutive month in July, down 0.8 points or 0.7 per cent to 113.6, the latest Roy Morgan survey has shown.
Driving the fall was a drop in expectations about the performance of the Australian economy over the next year, with 49.3 per cent (down 4.9 percentage points) expecting “good times” for the Australian economy and 43.7 per cent (up 5.1 percentage points) expecting “bad times”.
However, longer-term views on the Australian economy were little changed in July, with 50.5 per cent expecting “good times” for the Australian economy over the next five years and 38.7 per cent now expecting “bad times,” the survey said.
Currently, 40.9 per cent of respondents say their business is “better off” financially than this time last year compared to 30.6 per cent who said their business is “worse off” financially, according to Roy Morgan.
Businesses’ confidence about their performance in the next 12 months has increased slightly with 48.1 per cent expecting to be “better off” financially and 20.9 per cent now expecting to be “worse off” financially this time next year.
A slim majority of businesses, or 50.9 per cent, now say the next 12 months will be a “good time to invest in growing their business,” while 37.9 per cent say it will be a “bad time to invest,” Roy Morgan said.
Roy Morgan chief executive, Michele Levine, said despite a third monthly decline in a row, majorities of Australian businesses say now is a good time to invest in growing their business and expect good times for the Australian economy over the next five years.
“For the first time this year business confidence has also dipped below its level of a year ago but the strong start to the year means business confidence in 2018 is still enjoying its best year since 2014,” she said.
Levine said that towards the end of July there was some good news for businesses which traditionally prefer certainty rather than uncertainty, with victories for Labor in the Super Saturday by-elections removing the temptation for Prime Minister Malcolm Turnbull to call an early election later this year.
“Turnbull has since confirmed he plans on calling the next Federal Election in May 2019 and has reaffirmed the Government’s pledge to legislate further business tax cuts when Parliament resumes in the coming weeks,” she said.
“However, the removal of this election uncertainty came too late to have much impact on the monthly business confidence reading for July.”
