Despite 2.7-Point Drop of Business Confidence, Australian Business Owners Foresee Higher Revenue in Next 6 Months

By @ibtimesau on

Business confidence in Australia went down in March 2.7 points compared to the December quarter, according to the business index prepared by the Commonwealth Bank of Australia (CBA).

But despite the dip, confidence is generally high for the first quarter of 2014 at 14.3 points. It is the second-highest reading since CBA started making the survey in September 2011.

The survey found that 35 per cent of Aussie businesses expect conditions to improve in the next six months, down from 47 per cent in the 4th quarter of 2013.

Over half expect revenue to increase and 46 per cent anticipate an improvement in profit.

The decline notwithstanding, CBA chief economist Michael Blythe said, "With risk appetite, business capex and labour hiring expected to increase, this bodes well for the broader economy. Stabilisation of the jobs market is needed to support consumer confidence and the growth transition to non-mining activity will be driven by greater investment in the mid-market."

Adam Bennett, executive general manager for Local Business Banking of CBA, said survey results indicate a sense of optimism among small business owners. He pointed out that "Overall economic conditions look largely positive, with strong employment growth, low interest rates and a healthy housing market supporting improving business confidence and spending patterns."

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