Roy Morgan Business Confidence has jumped to 106.4, up 10.4 points since December, bringing it to its highest level since April 2022.
The 10.4 increase from December is the largest jump to start a new year since the index began over a decade ago, although the increase came before the RBA’s decision to increase interest rates for a ninth consecutive meeting.
The Australian economy’s success over the coming year and whether now would be a suitable time to make investments in the expansion of the business were the main drivers of the rise in business confidence.
Michelle Levine, CEO of Roy Morgan, said now 49.3 per cent of businesses say that there will be ‘good times’ economically in Australia for the next 12 months and 48.3 per cent state that the next year will be a ‘good time to invest’ in growing the business.
“At an industry level, there were five industries flying high in December 2022 – January 2023 with Business Confidence above 110. Leading the pack are Education and Training on 123.9, Recreation and Personal on 118.4 and Information Media and Telecommunications on 113.2 – the only three industries to increase Business Confidence by over 10pts compared with the same time a year ago.
“In contrast there are two industries for which Business Confidence is lagging more than 20 per cent below the national average including electricity, Gas and Water, down a large 23.2pts (-29.2 per cent) on a year ago to 56.3, and Finance and Insurance, down 35.3pts (-31.2 per cent) to 78.0.”
Despite the positivity around the coming year, businesses remain broadly negative on the longer-term outlook for the Australian economy, with 50.6 per cent expecting ‘bad times’ over the next five years.