The finance and insurance sector has consistently achieved higher than average business confidence results over the past six months, according to Roy Morgan Research.
The Roy Morgan Research Business Confidence survey showed business confidence in the finance and insurance sector was 17 per cent higher than the national average in February.
The finance and insurance sector was 137, but has been higher in previous months, Roy Morgan Research industry communications director Norman Morris told ifa.
“In February, it was above the average of 117, but has been tracking higher than average for quite a few months,” Mr Morris said.
“It has dropped slightly from previous months, but is still higher than the average at 137,” he said.
Over the past quarter, mining has remained the most confident sector (165.3), with the other industries well below, such as construction (135.1), manufacturing (120.6), retail (118.3) and agriculture (106.6).
In the past month, all of these industries have shown further declines, according to the report.
National business confidence fell 12 per cent to 117.3 - down from 131.5 in January - and back to below the level in August 2013 (119.6), in the month prior to the federal election.
The fall in business confidence in February was caused by a decrease in positive feelings about where the economy is heading in the next 12 months and the next five years, according to the report.
February’s decrease was greatest among micro-businesses, down 14.9 points to 115.2, and small businesses, where it was down 9.0 points to 131.0.
“With nearly 90 per cent of businesses in Australia being classified as micro (annual turnover below $1 million), it is of major concern that they have shown the biggest drop in confidence in February and as a result are now clearly the least confident business sector,” Mr Morris said.
“This has major implications for employment levels in the near to medium future,” he said. Medium and large businesses (those with a turnover greater than $5 million per annum) were fairly steady, down 4.3 points to 143.9.
Mr Morris said the reason for the fall in business confidence in February was anticipated, given the number of negative high profile stories during the month.
“These included the federal government decision not to support SPC; the plans by Qantas to reduce their workforce by 5,000; Toyota announcing that it was ceasing car manufacturing in Australia, and the very big impact this will have on the parts suppliers as it was the last car manufacturer; Alcoa announcing that it was closing several smelters; and the Telstra decision to cut employment in its directories division,” he said.
All states except Tasmania have shown a decline in business confidence during February, with the biggest drop being in Victoria, which fell to 115.8 (down from 134.3 in January).
The other negative movers were Queensland (down 15.3 points to 118.6), NSW (down 14.3 points to 118.2) and South Australia (down 9.1 points to 124.4).
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