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Manufacturing the most confident industry: report

Mid-sized businesses in the manufacturing sector expressed the highest levels of confidence out of all sectors in the June quarter, according to a Commonwealth Bank survey.

The Commonwealth Bank Future Business Index gauges business confidence based on expectations for the next six months. According to the survey, manufacturing recorded a confidence level of 22.5 for June, an increase of 7.3 above the previous reading of 15.2.

The June index for all sectors was 10.4, compared with 14.3 in the March quarter. The sector with the lowest confidence was retail at 3.1.

The survey found that confidence among manufacturers was boosted by the lower dollar and the subsequent improved trade prospects, as well as “a higher level of preparedness and better business planning”.

It found that more than half expected revenues and profits to rise in the second half of 2014.

The things that concerned surveyed manufacturers included the impact of exchange rates, government policy, increases in operating costs, and increases in labour costs.

In terms of the economy as whole, CBA executive general manager of corporate financial services Michael Cant told the Business Spectator that, despite the fall in the index for the June quarter, the businesses surveyed were "cautiously optimistic".

"Conditions have been challenging for some years now," Cant said. "They feel well adapted to an environment that is not booming but is not struggling.

"We saw an increasing willingness to think a bit longer term about some of the investment opportunities."

The survey involved 429 financial decision makers from all industries. They came from companies with a turnover of between $10 million and $100 million between May 29 and June 18.

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