Back To Listing

Business Confidence strengthens to 118.6 before Federal Budget

Source: Roy Morgan Business Single Source, Dec 2010-Apr 2018. Average monthly sample over the last 12 months=896.
Roy Morgan Business Confidence was up 3.2pts (+2.8%) to 118.6 in April and is now 2pts higher than a year ago 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. Thus 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% (up a large 13.6ppts) say the business is ‘better off’ financially than this time last year and a record high 59.4% (up 8.2ppts) say the business will be ‘better off’ financially this time next year.

April Roy Morgan Business Confidence is now just below the latest weekly ANZ-Roy Morgan Consumer Confidence, which is at 119.2 on April 28/29, 2018.


Roy Morgan Monthly Business Confidence -- Australia

Roy Morgan Business Confidence - April 2018 - 118.6

Source: Roy Morgan Business Single Source, Dec 2010-Apr 2018. Average monthly sample over the last 12 months=896.


April increase driven by increasing confidence about performance of businesses

  • Businesses believe they’ve performed well over the past year with a new record high 52.3% (up a large 13.6ppts) saying the business is ‘better off’ financially than this time last year compared to 32.2% (up 2.3ppts) that say the business is ‘worse off’ – a net improvement of 11.3pts;

  • Businesses have also grown more confident about their own performance going forward with a new record high 59.4% (up 8.2ppts) saying the business will be ‘better off’ financially this time next year compared to 22.5% (up 4.7ppts) expecting the 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% (up 0.3ppts) expecting ‘good times’ for the Australian economy while 41.1% (up 1ppt) expect ‘bad times’;

  • Longer-term views on the Australian economy are more positive with 51.6% (up 2.6ppts) expecting ‘good times’ for the Australian economy over the next five years and 39% (down 1.2ppts) now expecting ‘bad times’;

  • Slightly more businesses, 51.4% (up 0.3ppts), say that the next 12 months will be a ‘good time to invest in growing the business’, higher than the 39.3% (up 2.3ppts) that say it will be a ‘bad time to invest’.


Mining, Education, Agriculture, and Information media most confident industries

The strong start to 2018 for Roy Morgan Business Confidence has been broad based across industries with a clear majority of the 19 different industries measured now higher than they were a year ago.

The Mining industry has been the stand out performer over the past year and has a Business Confidence of 157.7 for the six months to April 2018, a stunning 43.6pts higher than a year ago.

Other industries to perform well include Education & training with a Business Confidence of 134.3 for the six months to April 2018, up 16.8pts on a year ago, and Agriculture, forestry & fishing now at 132.7, up 8.4pts.

Analysing the performance of all industries shows that 14 of 19 industries are now higher than a year ago and all 19 industries now have a positive Business Confidence rating above 100.


Top 5 Industries for Business Confidence in the 6 months to April 2018

Roy Morgan Business Confidence by Industry - April 2018 - 118.6

Source: Roy Morgan Business Single Source, Nov. 2016 – Apr. 2017, n=6,056 and Nov. 2017 – Apr. 2018, n=5,277.


Michele Levine, CEO Roy Morgan, says Roy Morgan Business Confidence traditionally strengthens in the run-up to the Federal Budget although there is often a letdown to follow:

“Roy Morgan Business Confidence increased 3.2pts (+2.8%) in April to 118.6 building on its best start to a year since 2014. The star performers on an industry level include Mining, Education & training, Information media & telecommunications, Manufacturing, Electricity, gas & water and Finance & insurance which have all increased substantially over the last 12 months.

“Analysing Roy Morgan Business Confidence by State reveals South Australia is again Australia’s most confident mainland State following the State Election in March ahead of Queensland which had the largest monthly increase in April.

“All four other States are clustered just below the national average in April with Victoria again the laggard with the lowest Business Confidence of any State. Victoria also happens to be the next State to face an election in just over six months’ time.

“Analysing longer-term trends for Roy Morgan Business Confidence does show that April is traditionally a positive month for the benchmark. Business Confidence has increased in five out of the last eight years in April in the weeks leading up to the Federal Budget.

“However, history also shows expectations are often disappointed in May with the month traditionally the poorest of the year for Business Confidence. In the eight year history index Roy Morgan Business Confidence Index has only increased once in May following the 2015 Federal Budget. The 2015 Federal Budget was seen as the most pro-business Budget delivered by the current L-NP Government with several tax incentives provided for small and medium sized businesses.”

Roy Morgan Business Confidence results in April are based on 957 interviews with a cross-section of Australian businesses. Business Confidence is above the 8yr average (116.4).
For comments or more information please contact:
Roy Morgan - Enquiries
Office: (+61) (03) 9224 5309
askroymorgan@roymorgan.com