Business confidence plummets
Business confidence for the first quarter of 2019 has collapsed, according to illion’s latest Business Expectations analysis. The Business Expectations Index for the March quarter stands at 20.9 points, down 7.1 per cent year-on-year and the lowest level since the December 2017 quarter.
“Several factors are driving business uncertainty. In the short-term we have an approaching federal election and the final report from the Royal Commission. These could potentially start a chain reaction beginning with business regulations and the availability of credit, and ultimately impact residential house prices and consumer confidence, which are already struggling. Globally, market upheaval in the US, Europe and Asia has continued into the new year. Additional unknowns in the form of a US government shutdown, Brexit and China’s weakening economy all appear to be feeding a ‘wait and see’ approach to decision making”
Simon Bligh, illion CEO
“It is likely that economic performance over 2019 will significantly undershoot the latest forecasts from the Reserve Bank of Australia. Any further downturn in business expectations will raise the possibility of significantly weaker economic conditions. The slowdown in the economy is beginning to affect business optimism. While not at levels which would signal a hard landing for the economy into 2019, the rising pessimism is pointing at a clear downside risk if the trend continues.”
Stephen Koukoulas, illion Economic Adviser