As Budget looms.
Roy Morgan Business Confidence rose 2.8% in April, continuing its best start to a year since 2014.
Business confidence traditionally increases in April in the run-up to a Federal Budget and has now increased in five out of eight years in April. However, recent history shows expectations are not generally met and business confidence has declined in six out of seven years in May. So far the ‘business friendly’ Federal Budget of 2015 remains the only year business confidence has increased.
This month’s increase comes on the back of increasing confidence amongst businesses about their own performance. Now a record high, 52.3%, said business is ‘better off’ financially than this time last year and another record high 59.4% said business will be ‘better off’ financially this time next year.
Increasing confidence about business performance
Businesses believe they’ve performed well over the past year with yet another record high 52.3% reporting business is ‘better off’ financially than this time last year compared to 32.2% who said business is ‘worse off’.
Businesses have also grown more confident about their own performance going forward with 59.4% expecting business will be ‘better off’ financially this time next year compared to 22.5% who expect business to be ‘worse off’ this time next year.
Businesses’ views on the performance of the Australian economy over the next year are little changed with 52.6% expecting ‘good times’ while 41.1% expect ‘bad times’.
Longer-term views on the Australian economy are more positive with 51.6% expecting ‘good times’ for the Australian economy over the next five years and 39% now expecting ‘bad times’. Slightly more businesses, 51.4%, said the next 12 months will be a ‘good time to invest in growing the business’, while 39.3% said it will be a ‘bad time to invest’.