Roy Morgan’s Business Confidence Index rose 2.8pts to 102.4 in June, exceeding the neutral level of 100 for the first time in several months.
“Roy Morgan Business Confidence increased 2.8pts to 102.4 in June following the record-setting re-election of the Albanese government early in May, and later in May the Reserve Bank of Australia’s decision to cut interest rates by 0.25% to 3.85% – the lowest official interest rates for two years,” said Michele Levine (pictured), CEO of Roy Morgan.
The monthly gain echoes NAB’s June survey, which showed conditions rose 8pts to +9 and confidence hit a 12-month high at +5, signalling early signs of stabilisation.
Roy Morgan data shows 39.6% (up 7.3pts) of businesses expect to be better off financially next year, while only 21.7% (down 1.8pts) expect conditions to worsen. Confidence about the national economy also improved, with 59.2% expecting good times in the year ahead.
“Businesses remain most confident about the Australian economy’s performance over the next year… this indicator has now been the highest of the five key indicators for over a year,” Levine said.
Business confidence surged in Victoria and Queensland (both at 106.6), with Western Australia (104.8) and South Australia (104.0) also above the neutral level.
In contrast, New South Wales and Tasmania fell below 100 due to political instability and subdued expectations.
The most confident industries in May and June were public administration and safety (130.9) and accommodation and food services (128.6), both over 25 points above average. Other upbeat sectors included utilities, retail, and financial services.
At the lower end, agriculture remained weakest at 63, with mining (86.5) and transport also showing persistently low confidence.
Despite rising optimism, elevated input costs remain a challenge. Roy Morgan found that 44.7% of businesses believe now is a good time to invest (up 2.6pts), the highest level this year.
With strong gains in several states and sectors, and growing belief in a near-term economic rebound, June’s 2.8-point rise in Roy Morgan Business Confidence points to cautious optimism among Australian businesses. However, pockets of weakness remain in agriculture and resource sectors, as well as in politically unstable states.
