Also:
- National Australia Bank business conditions for March: 1 (prior was 0)
–
Confidence – From NAB chief economist Alan Oster:
- Confidence is now below its long-run trend and at its lowest post-election level
- Mining is still the least confident industry, while bright spots are emerging in services, construction and retail.
- “It appears as though firms are responding to the ongoing sluggishness in business activity, which has not quite reflected the exuberance of firms in past months,” Mr Oster said.
- “The stubbornly high Australian dollar, uncertainty over the global economy and the potential for significant ‘belt tightening’ in the upcoming budget, could all have contributed as well.”
On Conditions:
- Retreat from the near three-year highs recorded recently is consistent with expectations of a relatively modest recovery in business activity and a return to trend growth in the economy
- Most industries posted a lift in conditions in the month, especially mining, with the exception of transport and utilities and wholesale
- Sales eased, forward orders remain soft and employment lifted, but still points to subdued labour market conditions
- Inflation outlook is well contained and retail prices fell
- Dwelling investment and exports are likely to strengthen but a tight budget is expected to add to mining headwinds, the bank said.
- “Business conditions rose only slightly in the month and are still pointing to a sluggish recovery in business activity”
- “Trend business conditions have improved since mid-last year as lower interest rates and the Australian dollar helped to support activity, but have given up some of these gains recently”
- “Conditions facing wholesalers deteriorated heavily in March and are by far the weakest of all the industries covered in the survey — a concern given its characteristics as a bellwether industry”
—
NAB says its local economic forecasts are unchanged:
- Rate cut still expected late this year
- Unemployment to edge up and peak at 6.5 per cent in late 2014
