Australia saw an expected boost in business confidence during September as a result of Malcolm Turnbull’s appointment as Prime Minister, according to Roy Morgan Research.
The group’s latest business confidence index revealed a 9.9 per cent increase to 112.8 for last month. However, confidence is still below the five-year average (116.8) as well as the figure recorded 12 months ago (122.9).
Roy Morgan Research’s industry communications director Norman Morris, said it is not surprising that business confidence increased in September given the change of Prime Minister and the relative lack of bad economic news during the month.
“In the three weeks before Malcolm Turnbull was elected by the party room as PM, Roy Morgan Business Confidence was 104.2, and over the three weeks after it has averaged 115.5,” he said.
“Despite fluctuations in the ASX during September, it was down only 1.5 per cent for the month.”
Mr Morris said there are some tentative signs that increased confidence in some sectors will help make up for the decline in mining.
“In September, the greatest increase in confidence was seen in agriculture, manufacturing, retail and education/training. The all-important construction sector showed some improvement but remains around average in confidence,” he said.
Mr Morris said recent federal government tax incentives for micro-businesses to invest may be paying off as they are now the most confident sector, following their big improvement in September.
“Of some concern however is the decline in confidence during the month among medium and large businesses,” he said.
“The challenge for the federal government now is not only to maintain the current level of confidence, but to increase as it is still below the five-year average and 17.2 per cent below what it was after the government came to power.”