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Business Confidence Remains Strong Despite Slight Easing From Record High

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  • Future Business Index records second highest reading since inception
  • All industries and states record positive Index score for 2nd consecutive quarter
  • Confidence soars in Construction & Property Management sector

Confidence amongst Australia’s mid-market businesses remains high, despite a moderate drop in the Commonwealth Bank Future Business Index1 over the March quarter.

The March quarter Index eased slightly to 14.3, down 2.7 from the December quarter high of 17. While confidence edged lower, businesses remain positive with the Index recording its second highest reading since the survey began in September 2011.

The Index reveals nearly half of all mid-market companies are anticipating a lift in revenue and profit over the next six months. In addition, a growing number of businesses indicate they are well prepared to manage future volatility, up eight per cent quarter on quarter to 46 per cent.

According to the March quarter Index, many mid-market businesses remain confident that domestic growth (44 per cent) and consumer confidence (41 per cent) will have a positive impact over the next six months. While cost management remains a focus, businesses indicate that they have more of an appetite to increase risk and capital expenditure. In addition, the use of debt facilities for expansion and capital investment and funding from domestic and international markets is also expected to rise.

Despite this positive sentiment, there was a drop in the number of mid-market firms expecting business conditions to improve in the next six months, down from 47 per cent in the December quarter to 35 per cent in the March quarter. Businesses indicate that managing growth & expansion and access to skilled staff will be key challenges over the next six months.

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The Australian Business Executive (The ABE) provides an in-depth view of business and economic development issues taking place across the country. Featuring interviews with top executives, government policy makers and prominent industry bodies The ABE examines the news beyond the headlines to uncover the drivers of local, state, and national affairs.

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