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Business Confidence rises in January to 116.8 (up 2.4%) driven by more confidence in the Australian economy

Source: Roy Morgan Business Single Source (Australia), December 2010-January 2017. Average monthly sample last 12 months = 1,017.
Roy Morgan Research’s Business Confidence rose 2.4% to 116.8 in January driven by increasing confidence about the Australian economy. The rise in Business Confidence occurred despite the Australian All Ordinaries falling slightly in January, down 44.1pts (-0.8%) to 5,675 in contrast to the record highs on US indices following Donald Trump’s victory in the US Presidential Election.

This month’s rise in Business Confidence means Business Confidence is now slightly above the 6yr average (116.5).

Driving the increase in Business Confidence was increasing confidence about the Australian economy. A majority of businesses 51.7% (up 4.3ppts) expect ‘good times’ for the Australian economy over the next 12 months; a net positive of 11.5% (up 10.8ppts) and now 54.5% (up 1ppt) expect ‘good times’ for the economy over the next five years. Roy Morgan December Business Confidence results are based on 1,012 interviews with a cross-section of Australian businesses.

Monthly Business Confidence -- Australia

Roy Morgan Business Confidence - January 2017 - 116.8

Source: Roy Morgan Business Single Source (Australia), December 2010-January 2017. Average monthly sample last 12 months = 1,017.

However, despite a positive viewpoint on the Australian economy, businesses were less bullish on their own prospects – now 43.3% (down 3.6ppts) of businesses expect to be ‘better off’ this time next year cf. 15.9% (down 4ppts) that expect to be ‘worse off’ while 52.9% (down 1.9ppts) say the next 12 months are a ‘good time to invest’ cf. 37.9% (up 1.3ppts) that say the next 12 months are a ‘bad time to invest’ – so fairly mixed results for these two questions.

Michele Levine, Chief Executive Officer, Roy Morgan Research says:

“Business Confidence was up 2.7pts (+2.4%) in January – following seasonal trends which have seen Business Confidence increase in six out seven years during which this survey has been conducted. The increase in Business Confidence came after strong performances on international stock-markets following the victory of Donald Trump in the US Presidential Election although the Australian All Ordinaries Index fell 44.1pts (-0.8%) in January to 5,675.

“The biggest drivers of the improved performance in January were indicators looking at the performance of the Australian economy with 51.7% (up 4.3ppts) of businesses now expecting ‘good times’ for the Australian economy over the next 12 months and an even higher majority, 54.5% (up 1ppt) expecting ‘good times’ for the economy over the next five years.

“Analysing the movement of Business Confidence across the States in January shows strong rises in Victoria, Western Australia, Tasmania and Queensland – now clearly the highest Business Confidence of the larger States offsetting falls in South Australia and New South Wales. The fall in New South Wales came after popular NSW Premier Mike Baird shocked Australia’s political establishment by announcing his resignation as Premier in mid-January after less than three years in the State’s top job.

“Analysing Business Confidence by industry shows Education and training is now Australia’s most confident industry closely followed by Transport, Postal and Warehousing, Health care, Construction and Agriculture – even though this last industry has fallen month-over-month. All five of these industries are far more confident than the headline figure for January.

“In contrast, several industries continue to lag in confidence including Wholesale trade, Arts and Recreational services, Information media and Telecommunications and Mining – which is again the least confident industry sector in January despite a better than expected 2016. Australia posted a record trade surplus in December 2016 largely driven by big jumps in coal exports (up 14% month-on-month) and iron ore exports (up 10% month-on-month).”


For comments or more information please contact:

Norman Morris
Industry Communications Director
Office: +61 (3) 9224 5172
Mobile: 0402 014 474
Norman.Morris@roymorgan.com