National gains mask sharp contrasts in state-level momentum
Business confidence diverged sharply across states in December, with Tasmania recording the strongest reading nationwide while South Australia fell to the lowest level, according to Roy Morgan data.
Nationally, Roy Morgan Business Confidence rose 6.3 points in December to 105, its highest level in nine months. The increase followed the Reserve Bank of Australia’s decision to leave the cash rate unchanged at 3.6% for a fourth consecutive month.
Tasmania recorded the largest annual increase, rising 31.4 points from December 2024 to 134.6. Victoria rose 5.4 points year on year to 113.6, while Western Australia increased 6.4 points to 105.9. Business Confidence in New South Wales edged down 0.7 points from a year earlier to 103.4.
By contrast, South Australia recorded the sharpest decline, down 20.1 points to 87.9, the weakest reading among all states. Queensland also fell, declining 7.3 points to 98.6, placing confidence below the neutral level of 100.
At the national level, Business Confidence remains 4.8 points below its long-term average of 109.8, though it stands 23.5 points above the latest ANZ-Roy Morgan Consumer Confidence reading of 81.5 recorded in mid-December.
The December improvement was driven mainly by changes in how businesses assessed their own financial position. A total of 35.1% reported being better off financially than a year earlier, up 7.1 percentage points, while 31.9% said they were worse off. Looking ahead, 46.4% expect to be better off financially this time next year, up 6.4 points, while expectations of being worse off declined to 19%.
Expectations for economic conditions over the next 12 months also shifted, with 57% of businesses expecting good times and 40.8% expecting bad times. Views on the five-year outlook showed little change. Sentiment on whether the next 12 months present a good time to invest softened, with 40.3% saying it is a good time and 34.1% saying it is a bad time.
Industry results over November and December showed 12 sectors above the neutral level of 100. Electricity, Gas, Water & Waste Services led at 129.3, followed by Mining at 126.2 and Professional, Scientific & Technical Services at 116.6. Rental, Hiring & Real Estate Services recorded 114.1. Retail Trade recorded the weakest reading at 71.1, while Agriculture, Forestry & Fishing stood at 79.3.
The state divergence aligns with broader survey evidence showing that business sentiment remains uneven despite firm underlying activity. The National Australia Bank’s October business survey reported business conditions rising to +9, the highest since March 2024, supported by stronger sales and profitability, while business confidence eased to +6.
NAB reported capacity utilisation at 83.4%, pointing to continued tightness in the economy, even as cost pressures moderated. Reuters also reported that NAB data showed easing price pressures alongside sustained activity levels.
The Roy Morgan December results are based on 1,174 interviews with Australian businesses conducted nationwide.
