Finance business confidence in decline

Yasmine Raso

Senior Journalist

19 January 2023

The finance and insurance industry has placed in the bottom five industries in Roy Morgan’s monthly Business Confidence index at 65.9 points in December, despite overall confidence recording a 5.8-point jump to 96.0.

Finance and insurance also recorded the second-largest drop in business confidence compared to the same time in 2021 declining by 50.8 points or 43.5 per cent, only 10.6 per cent behind the electricity, gas and water sector’s 56.8-point drop.

This comes as broader business confidence continues to sit lower when compared to December 2021, recording a year-on-year decline of 24.2 points or 20.2 per cent. It is also lower than it was during the COVID-19 pandemic in December 2020 (123.2).

“However, the real problem is that businesses continue to be largely negative on the outlook for the Australian economy with 58.7% expecting ‘bad times’ for the economy over the next year and 54.5% expecting ‘bad times’ for the economy over the next five years,” Michele Levine, CEO of Roy Morgan, said.

“On a State-based level Business Confidence is now in positive territory in the three States of South Australia (106.5), Western Australia (103.7) and New South Wales (100.7) and just below neutral in Victoria (95.3) and Tasmania (94.3).

“However, Business Confidence is lowest of all is Queensland at only 81.5. The ‘Sunshine State’ has had consistently low Business Confidence since this year’s Federal Election averaging only 81.9 over the last seven months (June – December 2022).”

The index also revealed that businesses are now less confident about making investments to grow their business, with 51.2 per cent saying it is a “bad time to invest”.