Further improvements in business sentiment
Prospects appear to be improving for the nation’s companies, as the latest Roy Morgan Research Business Confidence points to the strongest results since January.
November results show a 7 per cent increase in confidence levels over the course of the month, bringing the overall reading to 123 points. This is higher than the four-year average of 118.2 and eliminates some of the volatility seen over recent months.
Norman Morris, industry communications director at Roy Morgan, explained that much of this rise was a result of businesses revealing their intentions to expand.
“Economic growth depends to a large extent on increased business investment, and in November the proportion of businesses considering that the next 12 months would be a good time to invest in growing their business increased to 62 per cent,” said Mr Morris.
This is the highest since January and is considerably greater than the 55 per cent and 56 per cent recorded in July and August 2013, respectively.
South Australia was the only state where confidence hadn’t witnessed an increase, as the region lagged behind many other parts of the country.
Confidence was witnessed in some sectors – namely retail, construction and manufacturing – as some industries are forced to step up to the plate and plug the gaps left by the end of the resources boom.
Manufacturing remains below average, whereas construction and retail are both slightly higher than expected on the index.
In recent weeks, IBISWorld explored some of the opportunities and challenges faced by the retail sector over the festive period. Strong seasonal demand is once again expected to take control, making up for some of the weaker trading seen throughout the rest of the year.
Companies hoping to stay in the driving seat over the coming months might want to take a closer look at HRMS for small businesses.