The retail trade industry was feeling less confident in August 2025, according to new data from Roy Morgan.
Retail trade fell into the five least confident industries in August, with a score of 95.6. This is down from June and July, when retail had a score of 108.5.
Retail’s confidence fall joined a business sector-wide slip in August, falling 4.4 points to 98.6, back under the mid-level of 100. This is despite the Reserve Bank electing to cut interest rates by 0.25 per cent to 3.6 per cent at its meeting in mid-August.
It is also the lowest rating for four months since April 2025, but Roy Morgan pointed to green shoots, with the ASX200 stock-market index hitting a record high above 9,000 for the first time at 9,019.1 on August 21.
The ASX200 has since balanced at 8,836.60 as at the time of writing.
According to Roy Morgan, the decrease in business confidence overall in August was primarily driven by rising concerns about the next year both in terms of the business performance and also the broader state of the Australian economy.
In August, businesses lost confidence about their own prospects over the next year with 39.6 per cent (down 1.3 ppts) expecting to be ‘better off’ financially this time next year compared to only 24.3 per cent (up 4 ppts) that expect to be ‘worse off’ financially.
There was a fall in confidence about the prospects for the Australian economy over the next year with 57 per cent (down 5 ppts) expecting ‘good times’ for the economy over the next 12 months – the lowest figure for this indicator so far this year – compared to 40.4 per cent (up 4.5 ppts) expecting ‘bad times’.
Business confidence is now 11.4 points below the long-term average of 110, but 9.3 points higher than the latest ANZ-Roy Morgan Consumer Confidence of 89.3 on September 1-7, 2025.
Accommodation and food services continues to remain the most confident industry, with bump ups in financial and insurance services and administration and support services rounding up the top three.
Over the last two months there were 12 industries with business confidence in positive territory above 100 led, with electricity, gas, water and waste services and mining both filling out the top five industries.
There were two industries with business confidence deeply in negative territory below 90 during the last two months and the least confident industry is public administration and safety at only 75.6.
Only slightly higher is agriculture, forestry and fishing on 76.0.
Roy Morgan CEO Michele Levine said the fall in confidence could have also been impacted by falling hopes in further interest rate cuts after the latest data from the Australian Bureau of Statistics (ABS) showing inflation accelerating to 2.8 per cent in July 2025 – the highest figure for a year since July 2024. The Reserve Bank next meets in three weeks’ time on September 29/30, 2025.
“On a state-by-state basis, business confidence was highest in Western Australia (125.7) and Tasmania (124.4) after the Liberal Premier Jeremy Rockliff was eventually re-appointed in August after a close election that led to little overall change,” Levine said. “The final result from the Tasmanian election shows the Liberal Party (14 seats) and Labor Party (10 seats) winning the same number of seats as they held before the election and a large crossbench of 11 including five seats for the Greens.
“However, Business Confidence is below the neutral level of 100 in the two largest states of New South Wales (87.7) and Victoria (92.2) and has dropped significantly compared to a year ago.”
Victoria and New South Wales both face elections in the next 18 months, on November 2026 and March 2027 respectively.