In April 2021, business confidence surged to a seven-year high, increasing from 62.9 to 125.3 thus rising by 48.4 points from levels recorded 12 months ago.
Just over one year ago, business confidence hit a covid-19 pandemic record low of only 76.9 during the month of April 2020.
Business confidence is 11.6 points above the long-term average of 113.7 points. Almost 65 percent of Australian businesses reported having an optimistic economic outlook, expecting “good times” for Australia’s economic recovery over the next year. This is the highest rating the recorded for this indicator since September 2014.
On top of this a decent majority of 59.5 percent of businesses believe that the next 12 months is a ‘good time to invest in growing their businesses’.
Business confidence for the month of April 2021 is 13.7 points, or 12.3 per cent higher than consumer confidence, which currently sits at 111.6 points.
This is the best start to the year since 2011, as business confidence averaged 122.7 points during the first four months of 2021, largely attributed to the success of the “mining boom”.
Business confidence also averaged a record-high of 130.3 points over the first four months of the year, even when JobKeeper drew to a conclusion, which was expected to lead to a fall in business confidence.
The concerns that a large number of people had about how the Australian economy would deal with the end of the $90 billion JobKeeper wage subsidy in March appear to have been overstated, with businesses at their most confident since the 2014 federal budget almost seven years ago.
The industries who have reported the highest levels of business confidence for the month were led by the public administration and defence sector, which recorded 157.9 points, up by 51.9 points on the same period last year.
This is followed by the industries of wholesale, agriculture and retail. Retailers have experienced a year of record sales, although the ending of the government’s JobKeeper wage subsidy and the reduction in the JobSeeker payment at the end of March likely resulted in the end of the sales boom.
Wholesale was at 145.2 points, up by 65.3 points; agriculture, was at 144.3 points, up by 52 points; retail, at 137.9 points, up by 64 points; and education and training, at 135.7 points, up by 53.1 points.
There were only two industries who fell behind the national average, with the mining and electricity and the gas and water sectors falling below the natural level of 100 for the March-April period.
All six states across Australia recorded a significantly higher rate of business confidence than they did during this time last year, with Western Australia again recording 133.2 points, up by 37.3 points, a rate higher than any other state.
On a state-based level, it is the post-election Western Australia which had the highest business confidence at 133.2 points.
Business confidence across Victoria has also recovered, up by 47.7 points from last year to 130.1 points, the highest rate recorded in the state since January 2014, when its rating was 134.3 points.
The state to record the highest increase was South Australia, where business confidence climbed 59.1 points to 128 points for the month, while Queensland recorded a jump of 44.9 points to 124.8 points, still shy of the national average.
Business confidence in New South Wales dropped to 118.9 points; however, the state still maintains a 51-point increase on levels recorded in April last year. Tasmania trailed behind each of the states, recording business confidence of 110.1 points, a 21 per cent increase on levels seen across the state in April 2020.