RFI’s Agribusiness insights: Atlas Sentiment Index
RFI’s Agribusiness insights: Atlas Sentiment Index
Agribusinesses are doing it more challenging than any other industry
Here at RFI, we have been tracking thoughts and financial habits for many years. I want to share the outlook provided by our agribusinesses using RFI’s Atlas Business Sentiment Index. The Index can gauge the health of our businesses as a whole accurately. While an increasing number of these businesses have been doing it tough in recent years, we can see that agribusinesses have been hit harder than all other industries.
How pessimistic is the agri sector compared to other Australian businesses?
The Index factors in predicted revenue growth or decline for the year, issues affecting businesses, and the likelihood of them borrowing in the coming months. Industries with ratings over 100 are deemed to have a positive outlook, with those below 100 displaying negative sentiment. Agribusinesses, unfortunately, show by far the lowest level of sentiment, way behind the other seven industries in negative territory. The Information, Media and Telecommunications industry shows by far the most excellent level of optimism, followed by Electricity, Gas, Water, and Waste Services and then Arts & Recreation, and Retail.
Looking at sentiment trends, despite occasional improvements in outlook, optimism among Australian businesses has been declining since March 2022. The Agribusiness industry has sat well below the system over this period, and sentiment among this fraternity is declining even faster than it has been for the rest of the business community.
To provide more context, revenue predictions among businesses in this sector have gone from positive to negative over the past year. Most agribusinesses expect their turnover to decline over the next 12 months – 36% vs. 22% who predict it will rise. A year ago, 21% of Agribusiness enterprises expected a fall in revenue, with 21% forecasting an increase.
What is keeping our Agribusiness owners up at night?
Agribusinesses have a very different mix of issues affecting them than other organisations around the country, with managing costs, climate change, and government rules and regulations of particular concern to those in the industry. Interest rates, too, appear to bite harder for agribusinesses than they do for other ventures.
These challenges faced by most Australian businesses, particularly those in the agribusiness sector, have yet to be alleviated by the likely delay in starting the decline in interest rates predicted earlier in the year. When this occurs, we hope the created environment can help our business community thrive.
We will continue to monitor business sentiment closely over the next few months.
RFI’s Atlas Business Sentiment Index measures the level of confidence in economic activity among financial decision makers from Australian businesses. A level below 100 represents pessimism outweighing optimism while a level above 100 represents optimism outweighing pessimism. The Index is a weighted average of businesses’ expectations to increase or decrease revenue, their appetite for new borrowings and whether their top 3 concerns reflect growth or barriers to growth, either directly or indirectly. The index is based on a monthly survey of 1,500 financial decision makers from a representative sample of Australian businesses across all sizes and industries. The survey is fielded consistently throughout each month.
Data-driven insights for financial service leaders
Subscribe to The Banknote, our monthly newsletter delivering expert perspectives and exclusive analysis, powered by 200,000 consumer and 60,000 business interviews each year to help you stay ahead in a fast-changing financial world.
