Australian business confidence has stabilised after sharp falls earlier in the year, even as consumers remain deeply pessimistic under the combined weight of higher fuel prices and mortgage rates, new Roy Morgan data show.
Roy Morgan’s latest Business Confidence survey reports a modest March improvement from the lows seen in January and February, though the index is still well under the 100 level that separates overall optimism from pessimism.
“Roy Morgan Business Confidence increased 2.1pts to 90.7 in March – a small uptick after large falls in the opening months of the year – January (down 7.6 points) and February (down 8.8 points),” Michele Levine, CEO of Roy Morgan, said.
The survey links the March reading to a partial recovery in expectations for the Australian economy over both the next 12 months and the next five years.
Business sentiment is strongest in mining, rental, hiring, and real estate services, and utilities, while construction and several public‑sector related industries are well below average. That mix points to cautious investment intentions in building activity despite relatively resilient conditions in property‑related services.
The picture for households is considerably weaker. In its 8 April update, Roy Morgan reports that “ANZ-Roy Morgan Consumer Confidence increased 3.5 points to 62.3 – the first increase since the Middle East War started in late February.”
The Easter‑week rise breaks a run of falls but still leaves confidence at exceptionally low levels. As Roy Morgan notes, “However, despite the rise, this is the second lowest reading for consumer confidence since the series began over 50 years ago.”
The reports link the deterioration in household sentiment to a spike in petrol and diesel costs following the Middle East conflict and to the Reserve Bank’s decision to lift the cash rate to 4.1% in mid‑March. Higher fuel and borrowing costs are eroding disposable incomes and weighing on spending intentions for both everyday consumption and major purchases such as housing.
Roy Morgan highlights that inflation expectations remain elevated, with Australians anticipating price growth well above the central bank’s target over the next two years.
Persistently high expectations, together with very low consumer confidence, underline the risk that households will remain cautious even if business investment holds up.
The widening gap between comparatively steadier business sentiment and historically weak consumer confidence suggests a period of subdued demand, with implications for mortgage rates, borrowing capacity, and housing‑related activity as 2026 progresses.
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