Business confidence is swinging ahead, according to reports from National Australia Bank (NAB) and Roy Morgan Research, which were both released on August 12.
Consumer confidence, on the other hand, has declined in the week ending August 10, according to the ANZ-Roy Morgan Consumer Confidence index. However, based on averages since 1990, the current reading (108.5) is not far behind the historical average (113.2).
Those contemplating property investment in the coming months may be interested by the latest figures. While lower consumer confidence might seem like a negative, unwillingness to purchase real estate may lead to more individuals seeking rental properties, which is a plus for landlords.
Business confidence lifts
Business confidence improved during July, jumping to post-election figures, according to the NAB Monthly Business Survey. While the employment index remains at "subdued levels", favourable sales and profits have contributed to the 11 point reading for business confidence in July.
This is a 3 point increase from June, and a 4 point increase from May. The trading index leapt from 7 points to 14 points month-on-month to July, while profitability jumped from 3 points to 10 points over the same period.
"Much of the strength in July was concentrated in the construction sector, although conditions are positive in the majority of industries. With building approvals and house prices expected to slow over the next 12 months, we will need to see a more broad based improvement to maintain conditions at (or above) current levels," the report stated.
Roy Morgan Research also noted that business confidence has lifted as of late, which spells good news for economic growth across the country.
In June, business confidence posted a 10.2 per cent increase from the previous month, rising 11 points to 119.1 points, according to the latest Business Confidence survey.
"Both business and consumers are obviously overcoming the shock of the Budget and showing increased optimism in the short- to medium-term in the outlook for the Australian economy," Roy Morgan Research Industry Communications Director Norman Morris explained.
"In the meantime, the improved level of confidence in the economy picking up over the next five years is likely to increase the appetite for business expansion and borrowing which is good for economic growth and recovery."
Strengthening business confidence could have favourable flow-on effects in high-growth cities such as Sydney and Melbourne, highlighting the importance for investors to focus closely on where to expand their portfolio.