CURRENT BUSINESS SENTIMENT

Andrew Palmer
20 November 2024

The current business sentiment in Australia seems to be improving with moderate optimism.

In September 2024, the National Australia Bank’s (NAB) business confidence index rose slightly to -2 from August’s -5. This marked an improvement yet still indicating a cautious outlook with negative sentiment overall.
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However, the results from October 2024 in the Roy Morgan Business Confidence results showed 106.7 (up 12.4pts since September 2024) as official ABS monthly inflation dropped from 3.5% in July to 2.7% in August (announced in late September) and has now fallen to only 2.1% in September (announced in late October).
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Businesses have become more confident about the next year in October as inflation dropped rapidly and returned to the RBA’s target range of 2-3%.

Now 46.3% (up 5.2ppts) of businesses expect to be ‘better off’ financially this time next year and a clear majority of 59% (up 6.8ppts) expect Australia will have ‘good times’ economically over the next 12 months.

The principal driver of the positive sentiment in Business Confidence is related to investing in the growth of the business with 42.9% (up 6.9ppts) saying the next 12 months is a ‘good time to invest in growing the business’ compared to only 35.2% (down 10.4ppts) that say the next 12 months is a ‘bad time to invest in growing the business’ – a net positive movement of 17.3ppts.

This is good news for vendors out there that are looking for their customer base to invest in the growth and technology of their businesses in the next 12 months.

So what has been a challenging period, now the commercial market does seem to be predicting better days ahead which can only be good news for us all.