Business confidence has plunged, with many Australians believing economic conditions in Australia will not improve over the next year.
Roy Morgan Research’s latest business confidence survey for May shows confidence fell 5.5% from April after the National Commission of Audit Report and the Federal Budget were released.
Business confidence is now 16% below peak confidence in October 2013 following the new government, and 7.4% below the average over the last 12 months.
These May figures are the results of 1,372 interviews with all types of businesses across Australia.
The main reason for loss of confidence in May was less businesses felt economic conditions in Australia would improve over the next 12 months. This is now at its lowest level since July 2012.
Only 54% of people surveyed thought the next 12 months would be a good time to invest in growing their business, the lowest level since June 2013 and a drop of four percentage points since the month before.
Those in mining remain most confident, followed by finance and insurance.
Roy Morgan industry communications director Norman Morris said the decline in business confidence in May was expected given the uncertainty created by the build-up and delivery of the National Commission of Audit Report and the Budget.
“The hoped-for improvement in confidence in the key areas of retail, construction and manufacturing, which were seen as making up for a slowdown in the mining industry, did not happen during May, and these sectors all remain below average in confidence.
“The full impact of the Budget will ultimately depend on the extent to which the Federal Government is able to get it passed by the Senate and how long this process is dragged out, creating instability and uncertainty, which is not a good environment to make business decisions.
“In the meantime, the low level of confidence in the economy picking up over the next 12 months is likely to subdue the appetite for business expansion and borrowing which is not good for economic growth and recovery.”
Acquistions will let brokers 'make more money'
Rental vacancies not spurring first home buyers
Huge increase in investor loans likely to continue