Business confidence dips after Federal Budget

- June 19, 2024 3 MIN READ


Business confidence in Australia took a hit in May 2024, dropping 2.3 points to a score of 97.0, according to the latest Roy Morgan report.

This dip comes on the heels of a Federal Budget that didn’t quite deliver the boost many businesses had hoped for.

business confidence dips

What’s happening with businesses?

Short-term pessimism: More businesses are feeling uncertain about the immediate future. A notable 42.6 per cent think the next year is a bad time to invest in growth, up from the previous month. Only 38 per cent see it as a good time, the lowest level of optimism we’ve seen since April 2020.

Long-term hope: On a brighter note, there’s a slight increase in businesses feeling positive about the next five years. About 32.4 per cent expect good times ahead, a small uptick from April’s record low. Still, 55.2 per cent are bracing for tough times, though this is an improvement from last month.

State-by-state snapshot

business confidence

South Australia: Leading the pack with the biggest confidence boost, up 19 points to 101.6.

Victoria and Queensland: Both states saw significant rises, up 16.5 and 9.4 points respectively.

New South Wales: A slight increase, up only 2.2pts from a year ago.

Western Australia: Despite the highest confidence level at 110.2, it’s down a whopping 24.1 points from last year.

Tasmania: Struggling the most, with confidence down 10.1 points to 82.3.

Industry insights

business confidence by sector

Top performers: The Professional, Scientific & Technical Services sector is the most confident, followed by Education & Training, and Finance & Insurance. These sectors are feeling relatively upbeat about their prospects.

Struggling sectors: Transport, Postal & Warehousing, Retail and Agriculture are among the least confident. The Transport sector, in particular, is at a low point.

Why it matters for small businesses

Investment hesitation: With many businesses seeing the next year as a risky time to invest, small businesses might want to focus on maintaining stability and carefully consider any big spending plans.

Sector-specific strategies: Depending on your industry, you might face different challenges and opportunities. High-confidence sectors might be ripe for growth, while those in low-confidence sectors should focus on efficiency and cost management.

Regional differences: Business confidence varies by state, so consider your local economic conditions when planning your next steps.

What the experts say

Michele Levine, CEO of Roy Morgan, explains, “The Federal Budget didn’t boost business confidence as much as we’d hoped. Historically, it’s common for confidence to dip in May after the Budget. Yet this year, concerns about the next 12 months outweighed optimism about the long-term outlook.”

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