According to the Roy Morgan Monthly Business Confidence index, company sentiment slipped slightly in July from June, down 0.7 per cent – the third straight monthly decline.
While only a slight fall, the index (at 113.6 points) is now lower than both a year ago (117.0 points) and the long-term average (116.3). And only a tiny majority, at 50.9 per cent, believe that now is a good time to invest in growing the business.
Driving the fall in confidence is decreasing financial performance: 30.6 per cent of the more than 5,000 business leaders profiled believe their company is financially worse off now than this time last year, compared with 40.9 per cent who suggested their business is better off.
Nevertheless, Roy Morgan CEO Michele Levine suggested the figures are not all doom and gloom.
“For the first time this year, business confidence has also dipped below its level of a year ago; but the strong start to the year means business confidence in 2018 is still enjoying its best year since 2014,” she said.
Roy Morgan’s state-breakdown appears to show business confidence tracking alongside house prices, which are no longer driving the strong economic growth experienced during a multi-year boom in east coast markets.
Sydney has led the pack in terms of property price falls, according to Core Logic data, with prices easing 5.5 per cent over the past year.
NSW also recorded the lowest business confidence of any state.
At the other end of the spectrum, Tasmania and WA topped the confidence stakes, with business sentiment actually increasing in July.
It comes as Hobart recorded the fastest-growing property prices in the country with double-digit growth, while Perth’s fall of 2.3 per cent shows a moderation of previously free-falling prices, thanks at least in part to a resurgence in mining activity.