Australian business confidence is sagging, according to the latest Roy Morgan poll, signaling the end of the post-election bounce*.
Source: Roy Morgan Business Single Source, Dec 2010-Oct 2019. Average monthly sample over the last 12 months=912.
- A decreasing number of businesses (40.7%, down 5.8ppts) expect the Australian economy to have ‘good times’ economically over the next year while 52.4% (up 4.2ppts) expect ‘bad times’;
- In addition, just 44.1% (down 7ppts) of businesses expect ‘good times’ for the Australian economy over the next five years and 45.9% (up 2.9ppts) now expect ‘bad times’.
RBA interest rate cuts don’t seem to be working.
A similar picture is emerging in the US, where CEO confidence is near recession levels.
CEO confidence affects hiring and investment decisions and is an important leading indicator for GDP and earnings growth.
*Hat tip to Macrobusiness.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.