The National Australia Bank August Business Survey, business conditions and business confidence

Business confidence down sharply on the month to 5 (prior 12)

  • Firms express worries on margins, demand, government policy
  • Says NAB chief economist Alan Oster: It is probably too early to read much into the drop in confidence this month. While external shocks, such as the escalating tensions with North Korea, may have had some impact, we have actually asked for the first time in the Survey what firms see as being the most influential factors impacting confidence. For those indicating deterioration in confidence, the biggest concerns appear to be customer demand, government policy, as well as cost pressures - both energy and wages

Business conditions up 1 point on the month to 15 (prior 14, revised from 15)

  • conditions highest since 2008
  • long-run average is 5
  • retail still lagging

The main submeasures:

  • Trading down 1 point to 18 (a strong result for this measure of sales)
  • Profitability down 1 point also, to 15
  • Employment up 4 points to 11
  • Forward orders 4, just above average

Capacity utilisation rate at 81.6% (from 81.9% last month)

The improvement in the 'employment' measure augurs well for jobs growth. Says NAB chief economist Alan Oster:

  • There was a notable jump in employment for August - to near record highs
  • If employment conditions maintain these levels, that should see more than sufficient jobs creation to push the unemployment rate lower


National Australia Bank Business survey

  • More than 400 firms included