Roy Morgan Business Confidence has dropped 9.3 points to 96.7 in April 2025, falling below the neutral level of 100.
The research firm noted there was a similar trend three years ago when business confidence plunged by 12.8 points in the month leading up to the last Federal Election.
There was also US President Donald Trump’s ‘Liberation Day’ tariffs announcements which led to massive volatility, and falls, in share-markets worldwide and in currency markets in early April. This volatility and uncertainty persisted during April amidst the uncertainty of an election campaign.
The largest drop was for businesses assessing their prospects over the year ahead with only 36 per cent (down 8.8ppts) of businesses expecting to be ‘better off’ financially this time next year and only 24.3 per cent (down 6.6ppts) saying they are ‘better off’ financially compared to this time a year ago.
Looking forward, businesses are concerned about the long-term prospects for the Australian economy with a rising majority of 61 per cent (up 5.1ppts) expecting ‘bad times’ for the economy over the long-term compared to only 26.5 per cent (down 3.6ppts) expecting ‘good times’.
Business Confidence is now 13.5 points below the long-term average of 110.2, but 9.2 points higher than the latest ANZ-Roy Morgan Consumer Confidence of 87.5 for April 28 – May 4, 2025.
Roy Morgan CEO Michele Levine said the latest drop in business confidence is the largest for over two years since February 2023, with the index in negative territory under 100 for the first time this year.
“All five Business Confidence indicators fell during April as global uncertainty sparked by President Donald Trump’s ‘Liberation Day’ tariffs, as well as the political uncertainty of an election campaign, caused a sharp fall in confidence about business prospects and the state of the Australian economy,” Levine said.
“Although President Trump’s tariffs on Australian exports were at the base rate of 10 per cent, there were significantly higher tariffs on Australia’s main trading partner – China. The uncertainty caused by a potential trade war between the world’s two largest economies led to significant share-market falls worldwide – including in Australia.
“There was also a hit to the value of the Australian Dollar as uncertainty gripped the markets and many decision makers. Despite the initial shock, the uncertainty in markets began to subside after Trump suspended many of the threatened tariffs for 90 days and set about inking new trade deals.”
Levine added that the uncertainty about policy settings both locally and globally during April hit businesses’ confidence about their own prospects.
On a state-by-state basis, business confidence was in positive territory in only two States in April led by Western Australia at 109.8 following the re-election of the WA Premier Roger Cook’s ALP Government for a third term in a landslide winning 46 out of 59 seats in the WA Legislative Assembly.
“There was also positive business confidence in Queensland at 102,” Levine said. “However, business confidence is below the neutral level of 100 in the two largest states of Victoria (96.6) and New South Wales (91.7), and also in the two smallest states of South Australia (88.1) and Tasmania (86.4).
The most confident industries are electricity, gas, water and waste services on 126.9 and financial and insurance services on 124.
Other confident industries include accommodation and food services on 118.4 and education and training on 117.7.
“At the other end of the scale is agriculture, forestry and fishing on only 78.3, just below transport, postal and warehousing on 79.3 and the lowest average business confidence over the last two years of only 81.4. These are the only two industries with business confidence in negative territory well below the neutral level of 100.”