New data from Roy Morgan shows that retail trade was the fifth most confident industry in July, according to the research firm’s business confidence index.
Retail sits in the number five position with a score of 108.5, above the neutral level of 100.
The most confident industry overall is accommodation and food services, with a score of 123.1, followed by utility services (121.1), rental hiring and real estate services (114.8) and wholesale trade (113.9).
Overall business confidence rose 0.6 points to 103, and this came despite the Reserve Bank holding interest rates last month at 3.85 per cent amid widespread expectation of a cut.
Roy Morgan claimed the small increase in business confidence was driven by more confidence about businesses’ financial prospects and Australia’s economic performance over the next year.
For a second straight month, businesses grew more confident about their own prospects over the next year, with 40.9 per cent (up 1.3ppts) expecting to be ‘better off’ financially this time next year compared to only 20.3 per cent (down 1.4ppts) that expect to be ‘worse off’ financially.
There was also greater confidence about the prospects for the Australian economy over the next year with a rising majority of 62 per cenrt (up 2.8ppts) expecting ‘good times’ for the economy over the next 12 months – the highest figure for this indicator for over three years since February 2022 – compared to just 35.9 per cent (down 0.8ppts) expecting ‘bad times’.
Business Confidence is now 7 points below the long-term average of 110, but 12.4 points higher than the latest ANZ-Roy Morgan Consumer Confidence of 90.6 for July 28 – August 3, 2025.
Roy Morgan CEO Michele Levine said the Reserve Bank justified its decision to hold interest rates last month by wanting to see the latest June quarter inflation data, which was released last week.
“The latest ABS inflation data showed June quarterly annual inflation at 2.1 per cent – the lowest annual inflation for over four years since March 2021.
“The general view of market economists and media commentators is that this low level of inflation has all but guaranteed the Reserve Bank will now deliver an interest rate cut next week – likely by 0.25 per cent to 3.6 per cent.
“There are other signs that the Australian economy is strengthening, with the ASX200 stock index hitting an all-time record high of 8,757 in mid-July and the value of the Australian Dollar hitting its highest level so far this year at 66.3 US cents in late July.”
On a state-by-state basis, business confidence was highest in Western Australia (115.1) and Tasmania (114.2) despite an inconclusive election in the island state.
Levine said the final results from the Tasmanian election held in mid-July show the Liberal Party (14 seats) and the Labor Party (10 seats) winning the same number of seats as they held before the election.
“However, business confidence is below the neutral level of 100 in both South Australia (98.4) and Victoria (93.9) – the next two states to face elections. The next South Australian election is due in March 2026, and the next Victorian election is due in November 2026.”