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