National Australia Bank Business Survey for the October to December quarter

Business Confidence for the next 3 months: 6

  • prior 8, revised up from 7

Business Conditions next 3 months at 24, its highest sonce the early part of 2008

  • prior 21
  • long run average for this is +1 ... so conditions are way, way above average

Profitability for the next 3 months seen at 26

  • prior 24

Trading Conditions next 3 months 32

  • from prior 28

More from the NAB report:

  • most leading indicators improved in Q4 ... maintaining levels that suggest continued expansion in the next 12 months
  • Forward orders were up, as were expectations for business conditions in both 3 months and 12 months time
  • capacity utilisation rate was up slightly (at 82.5% compared with long-run average of 80.6%), which is an encouraging sign for both future labour demand and capital expenditure
  • Consistent with that, both employment expectations and capex plans (next 12 months) strengthened
  • growth in labour costs (a wage bill measure) steadied, but other indicators from the Survey are pointing to a tighter labour market
  • In particular, more firms indicated that it is more difficult to find suitable labour than it was a year ago - an indicator which tends to be highly correlated with the unemployment rate
  • Looking at the construction industry in more detail, residential construction conditions eased slightly, but remain quite positive despite concerns about oversupply, while other construction and construction services have been steadily improving
  • The Survey is suggesting subdued inflationary pressures, but labour costs (a wage bill measure) are still well up from their recent lows. Product price inflation rose modestly, while price growth for final products was steady - yet the Survey's margin index actually improved. Retail prices saw only modest growth in the quarter too, according to the Survey.

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Another strong report on the Australian economy .... I don't think anyone cares very much, AUD seems not to ... barely changed.

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The quarterly survey differs to the monthly survey

  • The quarterly NAB Business Survey gives a more in-depth probe into the conditions facing Australian business than the monthly survey, and also provides extra information about how firms perceive the outlook for their respective industries.