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Business confidence rises in the mining industry

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A quarterly Business Confidence report by Roy Morgan has highlighted a return in optimism for the mining sector.

In its September 2013 report the research outlines a return to confidence in business and the future of business not seen since the beginning of the year.

While the mining industry does not have the levels of business confidence that it reported in July 2011, it is a massive upswing following the downturn in confidence leading up to the election, standing at 137.3 points, an increase of 11.5 points from the previous quarter.

This is a swift return to business confidence after the industry experienced its lowest point recorded in August this year.

It is part of a nation-wide upswing and increased optimism about the coming year.

Of those surveyed, nearly half believed business will be better off next year, with only 10% predicting continuing economic woes, while a massive 77.4% expressed confidence in Australian industry's economic future in the next five years.

Roy Morgan Research said that business confidence is standing at its highest levels overall since January 2011.

It stated that confidence in the mining sector was directly related to the results of the election.

Nigel Smith, Roy Morgan Research's director of business research said "Australian businesses clearly expect the change in government to improve the fortunes of the economy over the coming year, and consequently believe conditions are now more favourable to invest in growing their business".

"Combined with the record low interest rates applied by the RBA, and the resulting fall in the exchange rate, there is good reason to be confident that Australia’s economic future is bright –particularly in industries reliant on exports or tourism," he said.

It comes as the BREE predicts mining's exports will surge.

Australia’s resources sector is transitioning from a construction to a production phase which industry minister Ian Macfarlane says will deliver “serious money” and boost exports.

The Bureau of Resources and Energy Economics said while construction across the resources sector has slowed, production continues to ramp up.

BREE predicts Australia’s export revenues will jump about 60 per cent over the next five years, growing at an annual rate of 7 per cent to total $284 billion in 2017

"The challenge for the new government is to meet these very high expectations held by the business community. If businesses continue to have confidence in the future of the economy, andt herefore invest, that confidence in itself should contribute to improved economic growth," Smith added.

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