National Australia Bank Business Survey for July

National Australia Bank business confidence, 12

  • prior was 8, revised from 9
  • Confidence jumps to its highest since pre-GFC

National Australia Bank business conditions, 15

  • prior was 14, revised from 15
  • Conditions highest since 2008
  • Long-run average is +5

NAB's summary:

  • The strong run shown by the business sector continued in the July NAB Monthly Business Survey, with both business conditions and confidence seeing an improvement.
  • Business conditions rose to its highest level since early 2008, although there were signs of a renewed divergence across industries. The sustained strength in business conditions appears to have buoyed confidence, and has likely contributed to the steadily improving trend in business confidence since early last year.
  • Persistent strength in the Survey's measure of employment conditions has made us a little more optimistic about the near-term outlook for the labour market.
  • However, we remain apprehensive about how the disconnect between the business and consumer sectors will be resolved - especially in light of sluggish retail conditions in July.
  • While the apparent strengthening of the labour market gives some reason for optimism, the RBA should be content with keeping interest rates on hold for a while yet given lingering risks to the outlook. Only tentative signs of moderation in the housing market and reluctance to see the AUD strengthen further are also reason to expect the RBA to remain on hold.

Some of the sub measures:

  • Sales down 1 point in July to a very strong +20
  • Profits up 4 to +18
  • Employment unchanged on the month at +7

Comments from NAB chief economist Alan Oster:

  • The persistent strength in employment conditions has made us a little more optimistic about the near-term outlook for the labour market
  • While that will be a welcome sign for the RBA, signs of inflation pressures remain elusive
  • Price and wage measures in the survey generally weakened again in the month, partly a reflection of elevated rates of underemployment

--

The National Australia Bank Business Survey is of over 400 firms

--

AUD higher in the wake of the data, it had been edging higher through the morning ahead of the results.