Change in PM helps improve business outlook

By Greg Bell

Australian businesses are generally more optimistic about what the future has in store, which is partly due to the recent change in prime minister. Two leading indicators of business confidence saw improvements last month, suggesting more companies could show an interest in buying commercial property in the near future.

Although political elements play a big role in sentiment, there are also various other factors that will weigh heavily on business owners' minds. The challenge now will be to make sure this renewed optimism can be maintained and translated into growth for the millions of Queensland businesses.

Political uncertainty is resolved

This year has so far proved to be a mixed bag in terms of corporate confidence. The political landscape has been particularly turbulent over the past few months, a situation that was seemingly addressed last month with the swearing in of Malcolm Turnbull as prime minister.

The NAB Monthly Business Survey for September 2015 suggested the nation's "leadership uncertainties were resolved", which in turn led to a partial recovery in business confidence.

During the course of September, the business confidence index increased four points to reach an overall reading of five. This compensated for much of the previous month's falls, but is still lower than the peak recorded in the middle of the year.

Meanwhile, Roy Morgan Research's Business Confidence Index witnessed an increase of 10.2 points between August and September. The group also believed this was a result of the change in prime minister.

The index shows that in the three weeks before Malcolm Turnbull was elected, the index stood at 104.2. During the following three weeks, this increased to 115.5.

Roy Morgan also revealed it's not just businesses that have seen an upswing in sentiment. The ANZ-Roy Morgan Consumer Confidence survey was up 8.7 per cent in the week after the new prime minister was brought in. However, it slipped back 4.1 per cent during the following two weeks.

Business conditions improve

It's not just sentiment that has been moving in the right direction recently, but also the conditions faced by Australian businesses. Once again, there's potential for commercial property for sale on the Gold Coast to be snapped up more quickly as companies make the most of the favourable business landscape.

NAB explained that the country seems to be heading towards a non-mining sector recovery, which could be just what it needs to secure its economic future. Ever since the slowdown in the resources sector, there has been widespread concern that the economy might take a hit, but these latest figures show this might not be the case.

Industries that are responsive to currency changes have experienced particular success over recent months, including personal and business services. These companies may therefore be interested in office leasing on the Gold Coast if they're in search of new premises.

Roy Morgan, on the other hand, found businesses are particularly optimistic about how the economy will perform in the next 12 months or five years. As a result, this might make them more inclined to invest in their operations.

Industry communications director Norman Morris said: "In September the greatest increase in confidence was seen in agriculture, manufacturing, retail and education/training.

"The all-important construction sector showed some improvement but remains around average in confidence."

Keeping pace

The next few months will be a testing time for the economy. There's still some uncertainty over whether the official cash rate is likely to be reduced any further, and if Malcolm Turnbull will deliver on many of his promises.

For the time being at least, conditions seem to be working in companies' favour. This could make it a good time to think about entering the Gold Coast property market.

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