Things are looking up; according to the ABS, the number of actively trading businesses in Australia has increased for the second year in a row. We are an entrepreneurial bunch!
“Although there was actually a small drop in the number of new business registrations, fewer businesses closed, giving a total rise of one per cent in business numbers an additional 21,000 businesses for 2014/15,” said Mike Booth from the ABS.
“Victoria saw the largest number of new businesses, while Tasmania was the only state to see a fall in total business numbers.”
Superannuation driving employment
According to Mr Booth, finance and insurance services were the fastest growing sector, but this was almost entirely driven by superannuation funds. Companies and trusts continue to be highly represented in Australian business structures, making up over 60 per cent of all businesses, while partnerships and sole proprietors continue to decrease.
Business confidence down
Despite the higher business numbers, the latest Roy Morgan Business Confidence survey reports that business confidence continues to drift lower.
According to Roy Morgan Research, the combined drop of 8.7 points (down 7.3%) over the last three months is an indication that the initial increase in confidence following Malcolm Turnbull becoming Prime Minister has been outweighed by the negative local and international economic environment which saw the ASX decline by 8.6% in the first three weeks in January.
The good news, though, is that despite this negative trend in business confidence over the last three months it is still 7.8% above the level prior to the appointment of the new Prime Minister.
“It is not surprising that business confidence has declined further in January given the negative market sentiment both locally and globally during the month,” said Norman Morris, Industry Communications Director, Roy Morgan Research .
“The continual publicity given to the slowdown in Chinese growth, the dramatic drops in the price of oil and other commodities and the deteriorating budgetary position at home have all impacted negatively on the ASX and business sentiment.
“A decline in confidence in January was seen across most industries including manufacturing, construction and retail- not a good sign for these sectors in which it was hoped would help make up for the collapse in mining. The most confident business sectors were rental/real estate, agriculture and wholesale trade.”