Business confidence has hit the highest level since January and has scored higher than the four year average, according to the latest business confidence survey.
The survey conducted by Roy Morgan Research jumped 5.9% in September, and is now only 9.8% behind the peak seen in October 2013 following the election of the new government. Sixty-one percent of respondents now think that the next 12 months would be a good time to invest, up from 57% in August.
Norman Morris, industry communications director at Roy Morgan Research says there were a number of reasons behind the improvement in business confidence over September.
“This improved outlook was a result of a number of factors, including issues relating to the budget going relatively quiet due to an increased focus on international events and the blocking by the senate of a number of major changes. Other positive impacts were interest rates being kept low, house prices continuing to rise and unemployment remaining unchanged.”
The ‘finance and insurance’ sector remained the most confident, followed by the ‘rental, hiring and real estate services’ sector. Although, the high profile sectors in which hopes for economic recovery have been focused remain below the average confidence level, with only ‘construction’ showing some signs of improvement, while ‘manufacturing’ and ‘retail’ are relatively steady.
However, Morris cautions that the recent optimism in business sentiment is likely to be short-lived.
“Although business has shown some improvement in confidence and is currently higher than the level of the ANZ
Roy Morgan Consumer Confidence, this optimism is likely to be very volatile with recent world social, political and economic events pointing to increasing levels of uncertainty for the business environment.”