National Australia Bank business confidence & conditions data result for October
NAB Business Conditions, unchanged on the month, coming in again at 9
- prior was 9
NAB Business Confidence slips to 2
- prior was 5
On the dip in confidence, (which NAB says was broad based), NAB cites:
- Government's leadership resolution appeared to have a notable (albeit temporary) effect
- Difficult to disentangle from concerns about growth in emerging markets and financial market volatility
- The recent drop in forward orders may also have weighed on confidence this month
More from NAB:
- Business conditions derived from our 'wholesale leading indicator' has previously had a good leading relationship with economic activity ... would imply a somewhat weaker business environment than the headline index suggest
- This could reflect margin squeeze from AUD depreciation given the difficulty passing on additional costs to retailers and final consumers.
So ... 'difficulty passing on additional costs to retailers and final consumers' .... There ya go .... no wonder business is less confident ... they're finding they can't stick it to the consumer!
ps. AUD barely changed on the data (and the housing finance, see link below)
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Out at the same time: Australian housing finance for September. Home loans 2.0% m/m (expected 0.0%)
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NAB's 'key points' (in brief): ... and bolding mine:
Business conditions were unchanged at an above average +9 index points in October, again consistent with the theme of recovery in non - mining sectors of the economy
- Employment conditions maintained the improvement recorded last month
- Trading conditions improved modestly ... Profitability eased - although both of these remain at very elevated levels
- Service sectors continue to report more favourable conditions than other industries
- Mining, manufacturing and wholesale were all negative
- Capacity utilisation increased further this month, which bodes well for business investment and the labour market
- Despite solid conditions, forward orders have weakened (turning negative in the month), raising the risk of a softening in activity in the very near term
Business confidence remains somewhat fickle
- Remained positive (at +2) - albeit still well below the long run average - and was unchanged in trend terms (+3)
- the deterioration was reasonably broad based, with only finance/ property/ business, manufacturing and mining improving (although mining remains negative)
The business survey still points to a reasonably resilient recovery in the non - mining sector
- Despite a number of downside risks (mostly stemming from offshore), should non - mining sectors continue to improve , we maintain the view that further RBA cuts are unlikely
- Monetary policy is expected to remain on hold for an extended peri od, although the timing of the first hike has been pushed out till mid - 2017