Business confidence in the finance and insurance sectors had a significant boost as a result of the federal election, according to latest research by Roy Morgan.
Among the industries showing the largest increases in business confidence as a result of the election were mining, manufacturing, accommodation and food services, with finance and insurance also recording a notable increase in 10 points.
The increase between August and September in the financial services industry is the biggest monthly increase the sector had seen since the survey began in December 2010.
This reflects the overall trend, with Roy Morgan showing business confidence in Australia has been slowly rising since June this year after a long period of ups and downs, but September saw a boost of 14 points – the biggest jump so far.
According to the research report, which was based on more than 2700 interviews with business decision-makers in the country across various sectors, the two biggest factors contributing to the increase in confidence were businesses reporting they expect good economic conditions in Australia over the next 12 months, and the rise in the number of businesses believing now was a good time to invest in growth.
“Australian businesses clearly expect the change in government to improve the fortunes of the economy over the coming year, and consequently believe conditions are now more favourable to invest in growing their business,” said Nigel Smith, director of business research at Roy Morgan.
“Combined with the record low interest rates applied by the RBA, and the resulting fall in the exchange rate, there is good reason to be confident that Australia’s economic future is bright – particularly in industries reliant on exports or tourism.”
The challenge for the new government is to meet these very high expectations held by the business community, Smith said.
“If businesses continue to have confidence in the future of the economy, and therefore invest, that confidence in itself should contribute to improved economic growth,” he added.
“So far the global economic uncertainty caused by developments in the US and Europe have not impacted on Australian businesses, but as Roy Morgan’s Business Confidence figures during the US Debt-Ceiling Crisis in July 2011 show, we are not necessarily immune to such effects.”
