Business confidence hit a record low in March as Roy Morgan’s business confidence indexed plunged day-by-day since mid-March.
The index said business confidence was down 9.1% to 95.1, which was more than four points below the previous bottom of 99.8 in July 2011.
While the index started to recover at the beginning of March from the summer bushfires, it started to plunge in mid-March as the COVID-19 pandemic hit Australia and prompted the Government to increase restrictions to slow the spread of the virus.
It said the March result was 11.6 points lower than it was a year ago, and a significant 19.8 points below the long-term average of 114.9.
Roy Morgan chief executive, Michele Levine, noted the $130 billion JobKeeper stimulus arrived too late to impact the index.
“…but the April results will be keenly watched to gauge whether this third stimulus package has stemmed the declines seen throughout the second-half of March. The previous two stimulus packages in March fell short and had negligible impacts on business confidence,” she said.
“The early assessment of the social distancing and self-isolation measures introduced to halt the spread of the COVID-19 coronavirus is positive.
“The rate of new cases in Australia has dropped significantly over the last two weeks and the latest figures from early April show that of around 5,700 cases reported over 2,300 have now recovered. Businesses will hope this ‘bending of the curve’ continues over the coming weeks and the economy can return to some level of normality as soon as possible.”
The biggest industry confidence declines were recreation and personal services (down 41%), and retail (down 25%). Other industries to decline significantly included finance and insurance (down 23%), community services (down 22%) and manufacturing (down 21%). However, transport, postal, and warehousing was up 24%.
“Overall, for March, business confidence was down by 26% in Tasmania, 16% in the ACT, 13% in Victoria and 12% for South Australia,” the index said.
“Despite a positive start to the month for the other states, the index fell by 9% in NSW, 4% in Queensland and by 2% in Western Australia for the month as a whole.”
The index also found that only 30.3% (down 9.2 percentage points) of respondents expected the Australian economy to have ‘good times’ economically over the next year while 62.7% (up 7.8 percentage points) expected “bad times”.
Another 46.2% (down 3.6 percentage points) of Australian businesses said the next year would be a ‘good time to invest in growing the business’, while 41.6% (down 1.4 percentage points) said it would be a ‘bad time to invest’.