New figures from Roy Morgan Research reveal that business confidence decreased last month but remains positive compared to previous years.
The latest findings from the firm revealed that business confidence dropped marginally by 0.6 points in November to 118.7 but remained above the five-year average of 116.9.
“It is a positive sign that Roy Mortgage Business Confidence has continued at a strong level, given the fact that the ASX not only declined during November but was also subject to considerable volatility,” Roy Morgan Research industry communications director, Norman Morris, said.
“Other potential negative impacts on confidence were major international events such as terrorist attacks and the global climate meeting in Paris.
“On the local scene, issues included a renewed focus on the budget deficit, the iron ore price and speculation on tax reforms.”
Mr Morris said there are some good indications that increased confidence in some sectors will help make up for the decline in mining.
“In November confidence increased in manufacturing, construction and accommodation/food services,” he said.
“The highest levels of confidence are currently in information/media/telecommunications and health care/social assistance.”
The research found that business confidence in November was highest in Tasmania, followed by Victoria, New South Wales, South Australia, Western Australia and Queensland.
Looking ahead, Mr Morris said in order to maintain strong business confidence, the federal government will need to take action that will “convince businesses that they have a clear, detailed and fair plan for budget recovery and economic growth”.
“The direction international events take will also have a major impact on business and consumer confidence but the government has only limited influence over these external factors,” he added.