"The modest recovery in Business Confidence was driven by an increasing proportion of businesses reporting that their financial position compared to 12 months ago has improved (up 4.5 points to 32.6%), and a return of confidence in the economic outlook for Australia in the next 5 years (up 2.4 points to 64.5%). There was also a sharp increase in the belief that the next 12 months will be a good time to invest in growing a business (up 3.8 points to 59.7%)" reads the report.
Confidence in the real estate sector grew by 1.8 points to 140.8, with professional services up 2.1 points to 126.1 and wholesale trade up 2 points to 130.1. ; While the finance industry remained at a very high level, it was down slightly by 0.6 points to 132.6. ; Business confidence in the mining industry suffered a major drop, 16.9 points down to 148.5. ; While mining remains the most confident industry sector in Australia, such a significant decrease is telling.
The Accommodation and Food Services industry saw a decline in confidence, down 4 points to 115.1. ; Retail was also down 1.1 points to 117.2, Transport down 7.3 points to 106.5, Education and Training down 5.2 points to 124.4, and Personal Repair and other services down 7 points to 112.3. ; With so many industries suffering a downturn in confidence, many of the hopes for 2014 rest with the real estate and finance sectors. ;
According to Nigel Smith, a director at Roy Morgan Research, the results say a lot about the strength of the property and banking industries: ; “With the exception of the mining industry, it is notable that between 2011 and 2014 the industry that has consistently shown the highest business confidence is the finance & insurance industry – corresponding (with) a period of historically low interest rates in Australia." ; However, Smith did warn of possible changes on the horizon, saying "If Australian interest rates do rise in 2014, business confidence in this industry is likely to suffer a setback.” ;
All states reported a decrease in business confidence in March, with Queensland showing the largest drop, down 4 points to 123.9. ; Western Australia also experienced a decline, down 2.9 points to 126.8, although it retains equal highest Business Confidence overall together with South Australia. ; Victoria experienced a 1.7 point increase in business confidence, recording 124.7. ; Victoria is experiencing particularly strong gains at the moment, as the only state to record an increase in business confidence across the board. ;
According to Smith, the strong figures from Victoria are also tightly linked to the real estate and finance industries: “The resilience of business confidence in March 2014 appears to largely reflect the strength of the finance and real estate industries, particularly in Victoria... Recent figures showing a surge in new dwelling approvals for the Melbourne CBD is most likely driving this, although the construction industry in the state appears to have only moderately benefited from this strength.”