The retail industry has backtracked on earlier slips in business confidence to an above-average ranking, even as wider business sentiment stays near record lows.
Retail trade recorded a business confidence score of 95.2 in the three months to September, according to the latest Roy Morgan data. Only public administration and safety (103.6), education and training (102.7) and arts and recreational services (102.5) ranked higher, and they were the only sectors in positive territory above 100.
Retail sat almost 19 points above the national average of 76.5. That national average was down just one point on a year ago, which puts sector sentiment roughly back where it was 12 months earlier.
The result is a sharp reversal for an industry that spent most of the year near the bottom of Roy Morgan’s rankings. Retail finished 2025 as the least confident industry on 71.1 and recovered to 85.9 in January. It then slid to 66.5 in the three months to June, down 41.4 points year-on-year. It was still among the five least confident industries in the three months to July on 69.8.
The latest reading is 25.4 points higher than that result.
The rebound came with little macroeconomic relief. The Reserve Bank raised the cash rate by 25 basis points to a 15-year high of 4.6 per cent in September. Australian Bureau of Statistics (ABS) figures showed annual inflation rising to 4 per cent in the 12 months to August.
Overall business confidence fell 2.6 points to 76.5. That is the sixth straight month below 80, and just above the all-time low of 76 recorded in July.
A record 76.3 per cent of businesses expected the economy to perform poorly over the next five years. Businesses were also less optimistic about their own position. 36.1 per cent expected to be worse off financially in a year, up 4.3 percentage points, and only 26.9 per cent saw the next 12 months as a good time to invest in growth, down 4.9 points.
“The high inflation estimates continue to put pressure on the Reserve Bank,” Roy Morgan CEO Michele Levine said.
Levine added the ongoing conflict involving Iran continued to push up oil prices, and with them inflation, which kept the RBA under pressure to lift rates further.
Victoria drove the national decline. Confidence there fell 20 points to 72.4 after a short-lived lift following the change of premier. New South Wales was the only state above 80, at 83.2.