Business Confidence Surges as Inflation Declines, Hitting a Two-Year High

By Robert Heyward

Roy Morgan Business Confidence rose sharply in October 2024, increasing by 12.4 points to 106.7. This marked the most positive sentiment in over two years, driven by falling inflation and growing optimism about the Australian economy and business investment.

Key Drivers of the Increase in Confidence

The October rise in Business Confidence coincided with significant declines in inflation:

• Monthly inflation: Dropped to 2.1% in September, as announced in late October, down from 2.7% in August and 3.5% in July.
• Quarterly inflation: Reached 2.8% for the September quarter, its lowest level since March 2021 and within the RBA’s target range of 2–3%.

This decline in inflation has improved economic sentiment and heightened expectations of future interest rate cuts, aligning Australia with trends seen in central banks overseas.

Roy Morgan Monthly Business Confidence Australia

Improved Sentiment Across Key Indicators

• Financial outlook:
  • 46.3% of businesses (up 5.2 percentage points) expect to be better off financially in a year.
  • Only 20.6% (down 4.4 points) anticipate being worse off.
• Economic outlook:
  • 59% of businesses (up 6.8 points) expect “good times” economically over the next year, the highest level since February 2022.
  • Confidence about the economy over the next five years also rose, with 35.6% expecting “good times” (up 4.4 points).
• Investment sentiment:
  • 42.9% (up 6.9 points) believe the next 12 months is a “good time to invest” in growing their business.
  • Only 35.2% (down 10.4 points) consider it a “bad time to invest,” the lowest level since June 2021.

Business Confidence by State in October 2023 vs October 2024

State-by-State Analysis

Business Confidence improved across most states, with New South Wales leading at 111.6, followed by Queensland (105.7), Western Australia (105.2), Victoria (104.4), and South Australia (102.4).

Tasmania (89.0) was the only state with confidence below the neutral level of 100, reflecting political instability within its Liberal-led government.

Industry Performance

The most confident industries in September and October included:

1. Public Administration & Defence: 160.1 (+48.9 points year-on-year).
2. Education & Training: 127.3 (+6.7 points).
3. Finance & Insurance: 121.6 (+20.7 points).
4. Recreation & Personal: 112.0 (+16.9 points).
5. Professional, Scientific & Technical Services: 111.0 (+11.9 points).

At the lower end, industries like Transport, Postal & Warehousing (72.6), Mining (78.3), and Agriculture (85.7) reported subdued confidence, with the Transport sector consistently lagging throughout the year.

Business Confidence for Top 5 and Bottom 5 Industries in September & October 2024

Commentary from Roy Morgan CEO Michele Levine

“Roy Morgan Business Confidence surged in October, reaching its highest level since April 2022,” Ms. Levine said.

“This increase was driven by improved optimism about the economy and growing sentiment that the next 12 months is a good time to invest in business growth. The rapid decline in inflation, combined with expectations of potential interest rate cuts, has fostered greater positivity among businesses.”

Ms. Levine also noted strong performances across major states and industries but highlighted the need for targeted support in lagging sectors such as Transport, Postal & Warehousing, and Tasmania’s struggling economy.

Conclusion

Roy Morgan Business Confidence is now just 4.5 points below its long-term average of 111.2, signalling a steady recovery in sentiment as inflation declines and businesses prepare for a potentially favourable economic environment.

For more detailed insights, the Roy Morgan Business Confidence Report is available via subscription.

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NSW Businesses Poised to Shine at Global Expo in China

By Robert Hayward

The NSW Government is backing 29 businesses from the food, beverage, and health supplement sectors as they prepare to showcase their products at the China International Import Expo (CIIE) this week. The six-day trade show, China’s premier import-focused event, draws dignitaries and exhibitors from over 150 countries, offering NSW companies a direct connection to buyers, distributors, and potential customers throughout China.

As NSW’s largest two-way trading partner for nearly 20 years, China continues to be a top consumer of the state’s agricultural exports, valued at $3.6 billion for 2023/2024. NSW’s wine exports have also surged since the removal of import tariffs earlier this year, signalling continued growth opportunities, especially for the state’s premium food and beverage sector.

Last year’s CIIE saw NSW businesses secure $40 million in export deals, and the NSW Government is once again committed to facilitating new opportunities for expansion and success. Among this year’s exhibitors is Mrs Toddy’s Tonics from Sydney’s Northern Beaches, which will present its range of plant-based beverages, already stocked in Australian supermarkets.

Other participating businesses include Pablo & Rusty’s Coffee Roasters, Australian Vintage Wines, Balance Water, and Noumi. The CIIE will take place in Shanghai from 5–10 November 2024.

For more information about the event and the full list of NSW businesses that’ll be exhibiting visit here.

Minister for Industry and Trade Anoulack Chanthivong said:

“The China International Import Expo is a leading event on the global trade calendar and offers unparalleled opportunities for NSW exporters to connect with buyers and distributors in China.”

“We are excited to once again showcase the best from across NSW at this prestigious import-focused event, including meat from the Riverina, wine from the Hunter Valley, spirits from Wollongong, and health supplements made in Sydney.”

“China has a strong appetite for produce made in NSW, which is globally recognised for its high quality and safety standards, with demand only set to grow.”

Mrs Toddy’s Tonics Co-Founder Sophie Todd said:

“We’re thrilled at the opportunity to introduce a proudly Australian, female-led brand to China, and look forward to showcasing the Mrs Toddy’s Tonic range on the international stage.

“We know that Chinese consumers are becoming more health conscious and are turning to products with natural ingredients, so there’s enormous potential for a business like ours to establish a presence in this lucrative market.”

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Business Bureau Marks a Successful First Year

By Ian Rogers

In its inaugural year, the Minns Labor Government’s Service NSW Business Bureau has provided vital support to small businesses, handling over 265,000 assistance requests.

Statewide, business owners have benefitted from approximately 45,000 hours of free, tailored advice on essential topics like strategic planning, marketing, and cash flow management. Since the Bureau’s launch in October 2023, its web pages have received over 2.2 million visits, offering businesses personalised guidance, expert advice, and access to digital tools.

A dedicated team of Business Concierges has streamlined the process for businesses to access government assistance. This includes understanding regulatory requirements, applying for necessary permits and licenses, accessing disaster relief, and receiving referrals for mental health support for business owners and their employees.

The Bureau’s rapid response team has delivered critical on-the-ground support during crises. For instance, they assisted over 140 businesses in the wake of the Bondi incident, provided aid to those affected by M6 sinkholes, and supported Northern NSW businesses disrupted by a fire ant infestation.

Digital tools like the Service NSW Business Bureau App and Business Profile have simplified access to government resources. More than 165,000 businesses have utilised these solutions, facilitating tasks such as license management and streamlined transaction handling.

Notably, businesses can now easily renew vehicle registrations through the Service NSW Business Profile or the Bureau Mobile App. This feature has already been used by over 21,500 customers, demonstrating the Bureau’s commitment to making business operations more efficient.

For more information on Service NSW Business Bureau, call 13 77 88 or visit here.

Minister for Small Business Steve Kamper said:

“I am passionate about small business, having lived it my whole career, and these customer numbers tell an amazing story of the significant support delivered by the Service NSW Business Bureau in its first year.”

“The Business Bureau is supporting small business owners no matter where they are on their business journey with free, tailored advice and digital tools which are helping to make being in business easier.”

“Driven by the priorities of the recently launched NSW Charter for Small Business, we are focused on working with small businesses across the State to tackle unproductive red tape, break down barriers and build a stronger future.”

“We know small businesses having been doing it tough, but now the Business Bureau is there for small businesses every step of the way.”

Minister for Customer Service and Digital Government Jihad Dib said:

“Small business owners across the State wear many hats which is why we remain committed to making support and services more accessible and more flexible than ever.”

“We have seen more than 165,000 businesses access the Service NSW Business Bureau app and their Service NSW Business Profile which shows the Business Bureau’s digital tools are making it easier for small business owners to access the advice, information and support they need on the go and at a time which suits them.”

Founder of Learnopolis Jennifer Kozanic said:

“As a new business, we needed advice about what sort of public liability, professional indemnity and level of cover we needed. We also needed support with considering who we should target with supplying our product and service.”

“The Business Bureau has provided great advice on writing grant applications, business development and pricing. Winning a NSW Government contract was huge for us as a two-person start-up.”

“Sam, my business concierge, genuinely wants to support us and to have someone cheering you on from the sidelines, who understands business, is something I would recommend for every owner.”

Founder of Parkview Realty Ben Burfitt said:

“The Business Bureau has been hugely supportive in making sure my application for both my class 1 real estate agent licence and business corporation licence were progressed.”

“To have someone who is able to liaise with other areas of the NSW Government was extremely beneficial in getting licence approval in a timely manner.”

“My business is new and so brand awareness is important to us. I look forward to working with the Business Bureau on how to develop this and market the company in a way that represents our story and what we offer.”

Business NSW CEO Daniel Hunter said:

“The NSW Government has done much to improve the digital interface with business. Our state has led the nation for the past decade. With rapid improvements in technology and a constantly evolving operational environment, this is an area we can never take for granted. The work must be continuous or we risk falling behind.”