‘We continue to be pleasantly surprised by just how upbeat the business sector is, given the context of a fairly beleaguered household sector that has been weighed down by limited wages growth and record levels of debt.’ – Alan Oster, NAB
The measure of business conditions in Australia jumped to its multi-year highs, nearing pre-crisis levels, as most of industries performed well, reporting higher sales and increases in profits. According to the National Australia Bank’s business survey, the Index of business conditions jumped to 15 points in June from the previous month’s 11 points, still far above the long-term average of 5 points. An increase was fuelled by strong gains in construction, wholesale and manufacturing conditions, while employment conditions remained flat, but provided enough momentum to diminish the unemployment rate in the coming months. There was a 10-point drop in mining sector, as it reflected negative movements in commodity prices. In the meantime, the Business Confidence Index rose just 1 point to 9 during the reported month, lagging behind conditions measure, while the Bank kept expecting such trend to continue. Overall, some risks to Australia’s economic perspective remained on the table, as important growth contributors such as housing construction, gas exports and commodity prices started to weaken.
