Australia August business confidence -8 (prior -14) & business conditions -6 (prior 0)

Author: Eamonn Sheridan | Category: News

National Australia Bank Business survey

Confidence is not as bad as it was. 
Conditions are a more objective measure and the August result shows a substantial deterioration in these, which is not too surprising given the harsh lockdown imposed on Australia's 2nd most populous city (Melbourne).

The main sub measures:
  • employment -13 (prior -2)
  • trading -2 (prior +1)
  • profitability -3 (+1)
Exports comes in at -4 (from -3) while exporter sales slumped to -13 (from -14)

That result for employment is dreadful. 

Key points highlighted by NAB (bolding is mine):
  • Business conditions unwound most of the previous month's gains - mainly reflecting a weakening in the employment index, though trading and profitability were also weaker. 
  • activity remains weak
  • there is some way to go before a full recovery can occur
  • Though confidence rose in the month, it remains very weak and likely fragile. 
  • Uncertainty around the virus and the global economy remains high, as does the path to a reopening domestically. 
  • The impact of the Melbourne stage 4 restrictions on activity is evident in Victoria with a decline in conditions -though not as bad as feared. 
  • Capacity utilisation - a measure of the level of activity - remains around 5ppt below its long-run average
  • This suggests that there is some way for the economy to see a full recovery. Only then can capex and employment intentions rise. 

For bank trade ideas, check out eFX Plus
By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose