Business confidence slipping
The initial rise in business confidence after the Government's leadership change in September 2015 seems to have cooled off with business confidence declining 4.2 points in December 2015, according to research.
Roy Morgan Research found the decline of 3.5 per cent to 114.5 that followed from the November decline of 0.6 points (down 0.5 per cent) put it below the five-year average (116.9) and was a sign that confidence is very fragile.
Consumer confidence finished 2015 on 115.4, up marginally on the November average of 115, but early signs for January showed that this slipped back to 114.1, the survey said.
Commenting, Roy Morgan Research's industry communications Director, Norman Morris, said despite the decline the drop had been moderate considering the number of negative issues recently.
"In December the ASX showed considerable volatility, being down five per cent mid-month, before rebounding to be up by 2.5 per cent for the month. This type of fluctuation, combined with global economic uncertainty (particularly China), the deteriorating Australian budgetary position, declining commodity prices and continued speculation on tax reform, all make for a very uncertain business outlook," he said.
"The sectors that showed a decline during the month included manufacturing, finance, insurance, professional services, mining, and wholesale."
Morris noted that business confidence was a key driver of economic growth, so it was essential for the federal government to take action to convince business they have a plan that will provide the positive environment for growth.
"International events will also be likely to continue to impact on business and consumer confidence but obviously, the government has little control over this," Morris said.
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