Research note from HSBC economists after the NAB business conditions and confidence data today

The gist of it is:

  • They say the business conditions indicator is positively correlated with domestic demand
  • Conclude that the rise in business conditions may indicate that domestic demand started picking up at the end of 2013
  • Says they see signs of rebalancing occurring in the Australian economy
  • Yes, employment data is weak, but because employment lags the economy, employment growth could pick up in early 2014
  • Continue to expect RBA’s easing phase is over