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.