Roy Morgan Business Confidence down by 1pt in December after RBA leaves interest rates unchanged again
In December 2024, Roy Morgan Business Confidence was 105.9 (down 1pt from November 2024) after the Reserve Bank left interest rates unchanged at a 13-year high of 4.35%. The Reserve Bank’s decision means interest rates have now remained unchanged at 4.35% for over a year since the last increase in official interest rates in late 2023.
Nevertheless, Roy Morgan Business Confidence has now had a positive rating above 100 for three months in a row – the first time this has been since the Albanese Government was elected in May 2022.
Businesses remain most confident about their personal circumstances and prospects with a plurality of 40.5% saying they expect ‘good times’ for the business over the next 12 months compared to 21.1% that expect ‘bad times’ – a net positive rating of 19.4%.
Businesses are confident the next year is a ‘good time to invest in growing the business’ with 42.8% saying it will be a ‘good time to invest’ compared to 37.7% that say it will be a ‘bad time to invest’.
Business Confidence is now 5.3pts below the long-term average of 111.2, but a large 20.1pts higher than the latest ANZ-Roy Morgan Consumer Confidence of 85.8 for January 13-19, 2025.
Roy Morgan Monthly Business Confidence - Australia
Source: Roy Morgan Business Single Source, Dec 2010-Dec 2024. Average monthly sample over the last 12 months = 1,589.
Business Confidence is up significantly from a year ago driven by NSW and Queensland
Business Confidence for the month of December was virtually unchanged on a month ago (down 1pt), but up significantly on a year ago, up 14.8pts from December 2023. Business Confidence is up in all six States from a year ago and has been driven by large increases in New South Wales and Queensland with increases of at least 15 points.
The largest increase was in New South Wales, up by a stunning 25pts to 104.1 and now clearly in positive territory. The most consequential increase was in Queensland, up by 16.5pts to 105.9 after the Queensland election in late October resulted in the election of a Liberal National (LNP) coalition government. This is the first LNP Government in Queensland for nearly a decade.
There were increases in other States as well including Victoria, up 7.7pts to 108.2 – and now the highest Business Confidence of any State, South Australia, up 5pts to 108.0, and Tasmania, up 3.4pts to 103.2.
The smallest increase was in Western Australia, up 1.2pts to 99.5, and now the only State with Business Confidence in negative territory below the neutral level of 100.
Business Confidence by State in December 2023 vs December 2024
Source: Roy Morgan Business Single Source, December 2023, n=1,497, December 2024, n=1,533. Base: Australian businesses.
Education & Training, Mining, Financial & Insurance Services, Arts & Recreational Services and Construction are the five most confident industries during November & December 2024
Over the last two months there were 12 industries with Business Confidence in positive territory above the neutral level of 100 led by Education & Training, Mining, Financial & Insurance Services, Arts & Recreational Services, Construction, Health care & Social assistance, Retail trade, Information Media & Telecommunications, Rental, hiring & Real Estate Services, Administrative & Support Services, Accommodation & Food Services and Professional, Scientific & Technical Services.
There were three industries with confidence well over 15pts above the average in November & December 2024 led by Education & Training on 129.0, up 14.9pts on a year ago. Education & Training has now been amongst the top five most confident industries for well over two years since June 2022.
Filling out the top three most confident industries which have had large increases in confidence during 2024 including Mining on 124.9, up a massive 44.4pts on a year ago – the largest increase of any of the industries measured, and Financial & Insurance Services also on 124.9, and up a large 41.9pts on a year ago.
In fourth place is Arts & Recreational Services on 116.4, up 14.5pts on a year ago ahead of Construction on 115, up an impressive 37.6pts and Health care & Social assistance on 113.1, up 4pts.
Other confident industries during November & December included Retail trade on 111.7 during the most important retailing period of the year with the pre-Christmas sales, Information Media & Telecommunications on 110.6, Rental hiring & Real Estate Services on 110.1, Administrative & Support Services on 107.9, Accommodation & Food Services on 105.8 and Professional, Scientific & Technical Services on 101.4.
The five least confident industries are led by Electricity, gas, water & waste services on 60.1, well below any other industry and in second last place is Wholesale trade on 84.4 and has averaged below the neutral level of 100 for over three years since late 2021.
Transport, Postal & Warehousing is on 89.2 which is its highest level of confidence all year having averaged only 75.2 during 2024 – more than 10pts lower than any other industry.
Business Confidence for Top 5 and Bottom 5 Industries in November & December 2024
Source: Roy Morgan Business Single Source, November & December 2024, n=2,990. Base: Australian businesses.
Note: In the chart above, green bars represent Business Confidence in positive territory above the national average, red bars represent Business Confidence well below the national average and below the neutral level of 100 while the dark blue bar represents Business Confidence above the neutral level of 100 but still below the national average.
Business Confidence virtually unchanged at 105.9 in December as net investing sentiment dropped and businesses became less confident about their performance over the next year:
- In December, over a third of businesses, 33.8% (up 2ppts), said their business is ‘better off’ financially than this time a year ago, while 33.5% (down 2.7ppts), said the business is ‘worse off’ – a marginally net positive rating of 0.3ppts (the first time this index is in positive territory since March 2023);
- Businesses’ views on their prospects for the next year dropped in December with 40.5% (down 6.9ppts) expecting the business will be ‘better off’ financially this time next year, while 21.1% (down 1.3ppts), expect the business will be ‘worse off’;
- Confidence regarding the performance of the Australian economy over the next year was virtually unchanged in December with a majority of 59.7% (up 1.1ppts), expecting ‘good times’ while only 37.6% (unchanged) expect ‘bad times’;
- In addition, businesses’ views on the long-term future of the Australian economy over the next five years were also virtually unchanged with 36.8% (up 0.9ppts) expecting ‘good times’ over the next five years compared to a majority of 54.2% (down 0.3ppts) expecting ‘bad times’;
- Net sentiment on whether now is a ‘good or bad time to invest in growing the business’ dropped in December with 42.8% (down 3.5ppts) saying the next 12 months will be a ‘good time to invest’ in growing the business and 37.7% (up 2.8ppts) who say the next 12 months will be a ‘bad time to invest’.
Michele Levine, CEO of Roy Morgan, says Business Confidence was virtually unchanged in December at 105.9, and the first time the index has been in positive territory for three straight months since the Albanese Government was elected in May 2022:
“Roy Morgan Business Confidence was virtually unchanged at 105.9 in December with four indices now in positive territory for the first time in two years since January 2023.
“The biggest drivers putting Business Confidence into positive territory are the two indices relating to prospects for the next 12 months. This includes a plurality of businesses, 40.5%, saying they expect to be ‘better off’ financially this time next year and a large majority of 59.7% of businesses saying they expect ‘good times’ for the Australian economy over the next 12 months.
“Although the Reserve Bank decided not to cut interest rates during 2024, the signs are there that interest rates will be cut this year. The latest ABS monthly inflation estimate for November 2024 shows annual inflation at only 2.3%.
“The reduction in the official ABS inflation estimates during 2024 is building expectations amongst many, including businesses, that the Reserve Bank will soon be embarking on a new cycle of interest rate cuts this year– and these hopes have helped to support and increase Business Confidence in recent months.
“On a State-by-State basis Business Confidence is in positive territory in five States including Victoria (108.2), South Australia (108.0), Queensland (105.9), New South Wales (104.1) and Tasmania (103.2).
“However, Business Confidence is lagging and in negative territory below 100 in Western Australia at only 99.5. West Australians are set to face a State Election in a few week on Saturday March 8 between WA Premier Roger Cook (Labor) and the Liberal-National opposition.
“At an industry level, it is Education & Training which is the most confident industry on 129.0. Education & Training has now been amongst the top five most confident industries for two-and-a-half years since June 2022. Filling out the top three are Mining and Financial & Insurance Services – both on 124.9.
“At the other end of the scale is Electricity, gas, water & waste services on only 60.1 below Wholesale trade on 84.4 which has now averaged below the neutral level of 100 for over three years since late 2021. In third last place is Transport, Postal & Warehousing on only 89.2. The Transport, Postal & Warehousing industry has been among the least confident industries this year and is the only industry for which confidence has averaged under 80 throughout the entire year of 2024.”
The latest Roy Morgan Business Confidence results for December are based on 1,533 detailed interviews with a cross-section of Australian businesses from each State and Territory. Detailed findings are available to purchase on a monthly or annual subscription as part of the Roy Morgan Business Confidence Report.
For comments or more information please contact:
Michele Levine
CEO, Roy Morgan
Office: +61 (3) 9224 5215
Mobile: 0411 129 093
To learn more about Roy Morgan’s Business Confidence, Consumer Confidence and Inflation Expectations data call (+61) (3) 9224 5309 or email askroymorgan@roymorgan.com.
About Roy Morgan
Roy Morgan is Australia’s largest independent Australian research company, with offices in each state, as well as in the U.S. and U.K. A full-service research organisation, Roy Morgan has over 80 years’ experience collecting objective, independent information on consumers.
Margin of Error
The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.
| Sample Size | Percentage Estimate |
| 40% – 60% | 25% or 75% | 10% or 90% | 5% or 95% | |
| 1,000 | ±3.0 | ±2.7 | ±1.9 | ±1.3 |
| 5,000 | ±1.4 | ±1.2 | ±0.8 | ±0.6 |
| 7,500 | ±1.1 | ±1.0 | ±0.7 | ±0.5 |
| 10,000 | ±1.0 | ±0.9 | ±0.6 | ±0.4 |
| 20,000 | ±0.7 | ±0.6 | ±0.4 | ±0.3 |
| 50,000 | ±0.4 | ±0.4 | ±0.3 | ±0.2 |
