- Australian business confidence has surged following the Coalition’s shock election victory, according to those firms surveyed by Roy Morgan Research.
- The increase in May was the largest since the Coalition entered office in September 2013. Firms surveyed after the election were particularly optimistic.
- A majority of businesses believe now is a good time to invest and expect “good times” for the Australian economy over the next five years.
Safe to say, Australian businesses, as a collective, liked the recent election result.
Following the shock reelection of the Liberal-National Coalition earlier this month, confidence levels have soared at businesses, lifting by the most since the Coalition took office back in September 2013.
Roy Morgan Research’s Australian Business Confidence Index jumped a mammoth 11% to 114.4 in May, driven by what the group described as “large increases in sentiment about prospects for the business over the next year and also about improving expectations for the Australian economy over the next 12 months and next five years”.
Image: Roy Morgan Research
“The increase was across the whole month although the small proportion of interviews conducted after the election had a higher level of Business Confidence (118.4) than the pre-election period (113.5),” Roy Morgan Research said.
Importantly, not only are businesses feeling more confident but they plan to invest, a good sign for the economy after sluggish capital expenditure from firms in recent quarters, including in the early parts of 2019.
“In May a majority of 51.3% of businesses say now is a ‘good time to invest’ in growing the business and a majority of 52% of businesses now expect ‘good times’ for the Australian economy over the next five years,” said Michele Levine, CEO at Roy Morgan Research.
“Businesses have finally got what they’ve been waiting for — an end to political uncertainty that has put downward pressure on [confidence] over the last 12 to 18 months.”
Given the surge in the Roy Morgan Research index, attention now will turn to the National Australia’s Bank’s (NAB) Business Confidence measure for confirmation of the lift in sentiment following the federal election.
Along with the NAB’s headline confidence measure, many will be looking for signs that businesses are looking to boost investment through increased hiring and capital expenditure.