Roy Morgan’s Business Confidence Index has lifted by 2.9 points to 99.6 in May 2025. It remains marginally below the neutral level of 100.
Over the last two months, there were 11 industries with business confidence in positive territory above the neutral level of 100, with nine leading in May 2025 including accommodation and food services, public administration and safety, education and training, electricity, gas, water and waste services, and rental, hiring and real estate service. The final four of the nine, in order, include retail trade, financial and insurance services, arts and recreation services and manufacturing.
The lift in business confidence came in the weeks after last month’s Federal Election, and deviates from the 2022 election, when business confidence dropped 2.9 points after the then-Federal Election.
The Albanese Government’s decisive victory at last month’s Federal Election has led to only a modest improvement in business confidence in May.
The election result produced mixed results across the five questions that comprise Roy Morgan’s Business Confidence index with more confidence around the long-term prospects for the Australian economy, where 32.6 per cent (up 6.1ppts) expect ‘good times’ over the next five years, and greater confidence that the next 12 months is a good time to invest in growing the business (42.1 per cent, up 3.9ppts).
There was less confidence about businesses own prospects with only 32.3 per cent (down 3.7ppts) expecting to be ‘better off’ financially this time next year – the lowest figure for this indicator for a decade since August 2015 – and only 22.5 per cent (down 1.8pptts) saying they are ‘better off’ financially than this time a year ago. The latter is the lowest figure for this indicator for five years since August 2020.
Business confidence is now 10.5 points below the long-term average of 110.1.
Roy Morgan CEO Michele Levine said the rebound in May followed a sharp fall in April due to the global uncertainty sparked by US President Donald Trump’s ‘Liberation Day’ tariffs. President Trump has since walked back and suspended the implementation of many of these tariffs which led to recovery in global share-markets and other indicators – including Roy Morgan’s Business Confidence Index.
“However, the recovery in business confidence was not widespread with the increase driven entirely by two indicators relating to the Australian economy’s performance over the long-term and an increasing willingness by businesses to make productive investments,” Levine said.
On a state-by-state basis, business confidence was in positive territory only in Queensland in May at 105. However, business confidence is below the neutral level of 100 in all other states including New South Wales (96.2), Victoria (98.3), Western Australia (96.5), South Australia (99.4).
“Business Confidence is lowest of all in Tasmania at only 86.9,” Levine continued. “This is no surprise given Tasmania has been beset by significant political uncertainty in recent weeks with a no confidence motion brought against Tasmanian Premier Jeremy Rockliff set to lead to an early election in the State in mid-July.
Despite the industries pushing ahead of the base level 100, there were others sitting below 100 at the other end of the scale, led by agriculture, forestry and fishing on only 68 and the lowest average business confidence over a sustained period of the last three years of 83.6 – the lowest average of any of the 18 industries.
Business confidence for the transport, postal and warehousing industry is at only 86.5 – the only other industry with a low business confidence below 90.
Other below 100 include construction, mining and administration and support services.