At 123 points, November’s confidence level now sits well above the four-year average of 118.2.
Research showed the increase in business confidence was reflected across all components of the index but was focused mainly on a more optimistic outlook for the Australian economy over the next 12 months and the opportunities this would provide to invest in business expansion.
Norman Morris, industry communications director for Roy Morgan Research said the improvement in business confidence in November was due largely to a big increase in the sense that the next 12 months will be a good time to invest in business expansion.
“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, which was the highest level since January and well up on pre-federal election levels of 55 per cent in July 2013 and 56 per cent in August.
“The RBA statement on the economy during the month remained cautious and although expecting moderate growth, the decline in investment in the mining sector was seen as an issue with the potential to negatively impact on growth to place it a little below trend.”
Mr Morris said unemployment remains a problem affecting confidence, with the Roy Morgan unemployment level in November reaching 10 per cent, up from 9.1 per cent in October. He also noted November was not a good month for the ASX which fell 3.9 per cent.
“Despite these negative factors, business is showing an improved level of confidence to the extent that it is now well above the ANZ Roy Morgan Consumer Confidence index that finished the month on 113.9 compared to business with 123.0," said Mr Morris.
"The movements in both business and consumer confidence are likely to remain volatile, with world social, political and economic events, as well as uncertainty regarding the Australian economy, likely to impact at any time."
Are you thinking of expanding your offering into SMSFs to grow your client base? Become a pro at SMSF fundamentals and make your clients bulletproof with the SMSF Foundations course. Learn directly from Aaron Dunn from Smarter SMSF as he deep-dives into the fundamentals you need to know to successfully undertake your work as an SMSF practitioner. Earn up to 21 CPD hours! Learn more