Business and consumer confidence rise thanks to Rudd
KEVIN Rudd's return to the leadership and his decision to axe the carbon tax a year earlier than planned helped drive up business and consumer confidence last month.
Roy Morgan Research's July Business survey showed confidence grew among the 2681 firms interviewed, ending four consecutive months of decline.
Consumer confidence was also up for the month among the 4165 people surveyed, although the rise was not as sharp.
The jump in business confidence was driven by an increase in the number of firms reporting they were feeling positive about economic conditions in Australia over the next year, up four points to 62%,.
Business confidence improved in all states except New South Wales in July, with Victoria and Tasmania leading the way.
Roy Morgan Research industry communications director Norman Morris said the downturn in the mining industry was having an impact on confidence in Western Australia, which fell back to average after leading the country for some time.
Mr Morris said several factors contributed to the nationwide upturn.
"Business confidence in Australia has improved for the first time in five months due to a number of positive factors impacting on business in Australia," Mr Morris said.
"These include an increase of 5.2% in the ASX 200 over the month, the end of the government wrangling with the electing of Kevin Rudd as PM, and the abolition of the carbon tax.
"The continual decline in the value of Australian dollar was also a positive factor for many industries."
Mr Morris said lingering concerns around the global economy, the China slowdown and no interest rate cut in July had dragged on confidence.
He said the same factors, positive and negative, had also influenced consumer confidence.
"But the smaller improvements seen in consumer confidence was also likely to be partly the result of no further decline in the home loan rate," he said.
"The decline in the official cash rate in early August is likely to have a positive impact on both business and consumer confidence in August."