National Australia Bank Business Survey for the October to December quarter of 2018

confidence 1

  • prior 3

conditions 16

  • prior 21

More:

  • profitability 14 (from 23)
  • forward orders 6 (7)
  • stock 0 (0)
  • margins 3 (5)
  • exports 4 (11)
  • employment 11 (13)

NABs summary comments:

  • Conditions in the business sector continued to ease in Q4 from their peak in Q1, although they remain just above average, consistent with an ongoing healthy level of activity in the business sector. Nonetheless, this does signal some loss in momentum through the latter part of 2018 and indeed the December monthly survey, despite showing signs of volatility, suggests conditions weakened further late in the quarter.
  • The decline in conditions has occurred across most industries, and is evident across all states. Forward looking indicators have deteriorated somewhat - confidence is below average, while expectations for conditions 3 and 12 months ahead and future capex eased and forward orders were flat.
  • Price pressures remain weak, despite capacity utilisation remaining relatively high. With reported difficulty in finding suitable labour continuing to edge higher, the survey does point to some further tightening in the labour market and, with ongoing employment growth, a continued gradual rise in wage growth.

Those comments … not overly confidence inspiring, looks like more softness to come ahead. Not overly bad, just not a surging economy on the horizon for now. makes sense … China … house prices slide weighing on consumers … debt …. slow wages …

Something to watch for will be a deterioration in the labour market …. that would be a big negative, if it comes.

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There is heightened attention on this today after the most recent monthly survey showed a plunge for business conditions:

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NAB's background to this is that the quarterly NAB Business Survey gives a more in-depth probe into the conditions facing Australian business than the monthly survey, and also provides extra information about how firms perceive the outlook for their respective industries.