The financial stability of Australian businesses is on the improve as companies watch their spending and borrow less. Challenges remain however for businesses in the commercial housing and resources sector.
The Reserve Bank’s latest Financial Stability Review reveals financial stress for Australian businesses is falling. Debt levels remain near historical lows, having fallen sharply after the financial crisis and remained in check since. This, combined with record low interest rates, has left businesses in a good financial position.
“Business finances appear generally in good shape,” the RBA said. Recent surveys have shown business confidence in Australia is struggling, and businesses are being frugal with their money as a result. “Like households, businesses remain fairly cautious in their spending and borrowing decisions, despite the low interest rates,” the report said.