Firms are more expectant of good times for the economy, which is encouraging them to invest in their businesses, causing business confidence to increase by 0.3% in August.
Some 53% of businesses surveyed by Roy Morgan said next year would be a good time to invest in growing their business and 54% said they expected “good times” for the Australian economy over the next five years.
Both of these figures were at their highest levels in over a year.
The increase meant business confidence was now level with consumer confidence, but still below its long-term average.
Confidence was highest in Western Australia while Victoria had the lowest, although it was still in positive territory
Despite their optimism, only 33% said their business was ‘better off’ financially than it had been last year, the lowest figure in three years.
Michele Levine, chief executive of Roy Morgan, said there had been a notable uptick in business confidence since the May Federal election as well as the interest rate cuts by the Reserve Bank of Australia.
“The recovery in business confidence in the post-election period means the measure over the last three months is up 1.7 points compared to the same three-month period a year ago,” Levine said.
“However, the increase has not been broad-based with around half the industries measured having higher business confidence compared to a year ago while it is down slightly for the other half.
“Driving the increase in business confidence over the last year are several industries led by wholesale up by 13.9 points to 128, property and business services up 26.6 points to 118.9, retail up by 15.2 points to 116.1 and information media and telecommunications up by 18.2 points to 111.5.”