Business confidence saw a modest improvement during January, according to the results of a non-government study. This data shows that recent rate cuts and a revival on the global economy are adding to business confidence.
Business confidence for one of the major banks saw a one point increase in December while the business conditions index (which looks at factors like profitability, goods orders and employment) saw a 3% recovery. The news is heartening in light of the Reserve Bank’s decision to leave the cash rate unchanged last week, citing signs of an uptick in the local economy and greater global stability. The rate cuts, which have amounted to a 1.75 percentage point drop since November 2011 were intended to stimulate non-mining regions of country following the tapering off of the period of resources boom that drove the economy for at least ten years.
In the lead up to September when voters to take to the polls it has emerged that the public no longer considers the federal government as trustworthy as it used to. Australia has joined a number of other regions where the status quo no longer has faith in their country’s business leaders and government.
The results from an annual trust barometer reflected that Australia was the only country, out of a total of 26, to drop its trust rankings for business, the four institutions of government, media and non-governmental organisations.
The decline has been attributed to a number of factors that include not keeping public promises, the on-going speculation about the economic slowdown during 2012, the highly publicised ballot and ultimately a crisis of leadership.
The local poll was conducted among 1000 locals while the total for the global survey included 31,000 participants. Credibility for the government’s leadership dropped by four percentage points to a low of 30% over the last 12 months.
Other findings from the poll included only 32% of respondents trust leaders to be transparent about the truth (a drop from last year’s 38%) and a 52% of respondents attributing their loss of trust to incompetence and poor performance. on the business front 46% said they did not trust corporate mavericks to tell the truth and 32% were of the opinion that a company CEO was still a credible information source.
Analysts have called for more integrity from government leaders in the run up to the election and have also cited purpose and engagement as being qualities that appear to be lacking in the current rule of power. Overall, confidence dropped by one point compared to 2012’s tally, to 39 points in total. Comparatively the UK saw an increase, from 35 points last year to 43 points this year. The United States experienced an increase from 40 points to 45 points while Japan’s confidence increased from 32 points to 35 points.
Confidence has also remained low for small businesses with over a third of organisations fearing their business will not grow in 2013 and 30% expecting the economy to contract further over the course of the coming year. The Asia-Pacific Small Business Survey looked at businesses with fewer than 20 employees in Hong Kong, Australia, Malaysia, Indonesia, Singapore and New Zealand and found that local business morale was not very positive. By contrast 50% of Indonesian businesses anticipate the economy will expand in the year head, an increase from only 42% in 2012. This sentiment was echoed by the same number of Malaysian businesses. 94% of Indonesian businesses and 87% of Malaysian companies expected their businesses to grow in 2013.
The serviced offices sector is currently seeing massive growth on the Asian and Australian continents, since an increasing number of locations across the two regions are developing at warp speed. Melbourne has been dubbed the world’s next Hong Kong by some – and by the looks of its top business addresses, foreign companies have got plenty of room to continue their expansion there.