Despite a 2.7 point fall in business confidence in January to 120.5, it is still 7.1 points above the long-term average of 113.4, with the finance and insurance rated at 122.9 points, according to the Roy Morgan Business Confidence index.
It was the first decline in the index since August 2020 and was now 18.9 points higher than it was a year ago.
The Business Confidence index was also above the ANZ-Roy Morgan Consumer Confidence index for January which was 112.1 points.
At the state level, all states were higher than a year ago and NSW, Victoria, WA and SA were all up at least 15% compared to a year ago.
Michele Levin, Roy Morgan chief executive, said business confidence increased by a record 40.1 points during the last four months of 2020 and that the January pullback wasn’t a surprise.
“Business confidence soared at a record-breaking rate during the closing months of 2020 as Australia got comprehensively on top of COVID-19 and in early December state borders opened up for a brief period as there were no local cases of the virus for several weeks,” Levine said.
“This run was halted in mid-December with an COVID-19 outbreak in Sydney’s Northern beaches and since then there have been separate outbreaks connected to the hotel quarantine program in Sydney (again), Brisbane, Perth and Melbourne.
“Early last year Australia was grappling with bushfires in many States. As well as the destruction of property and wildlife in many places there were heavy smoke hazes over Australia’s major cities including Sydney and Melbourne that kept people indoors and depressed confidence even before most people had heard of the virus that became known as COVID-19.”
Levine said there had been calls for targeted support for businesses heavily reliant on travel and tourism after the ending of the JobKeeper wage subsidy program next month and the current figures showed merit to that argument.
“As long as international borders remain closed and domestic borders are liable to shut with less than 24 hours’ notice it is very difficult for businesses reliant on tourists to attract customers,” Levine said.