Business is looking up

Businesses have had a tough time over 2024, yet now the economy is turning, consumer and business confidence is on the up.

A business outlook survey by ANZ for August showed more than 50% of respondents expected the economy to improve over the year ahead, compared with 27.1% in July. It was the highest level in a decade, with 37.1% expecting their own businesses to grow.

ANZ’s consumer confidence survey also showed an increase of 4 points in August, on top of a 5-point lift in July. Of note, the change in consumer and business sentiment started to improve before the interest rate cut in mid-August. That change in the cash rate will only serve to further reinforce the optimistic mood.

With a likely further decrease in October, all bodes well for the long-waited recovery. That is excellent news for business and consumers alike. Inflation is profoundly ‘evil’ as it cheats savers, undermines living standards, promotes business and market instability, distorts labour markets, and undermines confidence.

Although the indicators are pointing to recovery, it still remains a difficult time for many businesses, particularly in construction and retail. How can that be? Some may question whether or not the survey results be relied on, and if they’re an accurate indicator of what’s happening. They’ll question whether as a business owner they can rely on these indicators to make the right decisions for their business over the coming months and into 2025.

The ANZ business confidence survey has a large sample size, and is a consolidation of the individual intentions and future actions for those individual businesses, thus is an accurate summary and prediction of future activity, indicating it can be relied on to anticipate turning points in the economy.

The tide is turning, consumers are more and more looking to start spending, businesses are looking to grow. The past months, for many businesses, the focus has been on cost cutting and efficiencies to save money to survive their lower sales and rising costs.

It would be a mistake to not now look to the future and consider what you should be focusing on to capture your share of the recovery; to switch focus from saving money to making money and thriving in 2025. Consider how to attract and re-engage with customers as they re-enter the market, wanting to buy the things that they have likely been putting off buying during 2024.