COVID-19: Oz Business Confidence Hits A Record Low In March, But Could Rise In April
The Roy Morgan Business Confidence index fell by 9.1% in March to hit 95.1, a record low.
In the first two weeks of the month the index actually showed signs of continued recovery from the country’s difficult bushfire season, but plunged significantly in the latter half of the month, as the government’s COVID-19 restrictions ramped up.
The retail industry marked one of the sharpest decreases. “The biggest declines were for those industries particularly hard-hit by new social distancing and self-isolation directives, including Recreation & Personal Services (down 41%) and Retail (down 25%),” the Roy Morgan findings said.
Only 30.3% of businesses expected the local economy to have ‘good times’ economically over the next year, compared to the 62.7% that expected ‘bad times’.
By state, business confidence declined most in TAS (-26%), followed by ACT (-16%), VIC (-13%), SA (-12%), NSW (-9%), QLD (-4%), and WA (-2%).
Looking ahead, government support packages may lead to an uptick in business sentiment in April, despite the continuing COVID-19 pandemic – but Roy Morgan says it is too early to tell at this point.
“The $130 billion ‘Job Keeper’ stimulus package arrived too late to impact on Business Confidence for March but the April results will be keenly watched to gauge whether this third stimulus package has stemmed the declines seen throughout the second-half of March,” CEO of Roy Morgan Michele Levine said. “The previous two stimulus packages in March fell short and had negligible impacts on Business Confidence.”
In addition to stimulus packages, the effectiveness of social distancing and self-isolation measures may also reflect positively on business confidence in the month ahead.
“The rate of new cases in Australia has dropped significantly over the last two weeks and the latest figures from early April show that of around 5,700 cases reported over 2,300 have now recovered,” Levine said. “Businesses will hope this ‘bending of the curve’ continues over the coming weeks and the economy can return to some level of normality as soon as possible.”