National Australia Bank business confidence for July, big jump to +11

  • prior was +8

National Australia Bank business conditions for July, +8

  • prior was -2
  • Confidence highest now since August of 2013, and conditions highest since March back in 2010

NAB says:

  • “Firms still appear unfazed by the federal government’s ‘tough budget’, possibly taking comfort in the bounce back in consumer confidence”
  • “Stronger sales and profits are driving the trend, but the recovery continues to be relatively jobless with the employment index seeing more moderate gains.”
  • Said much of the improvement in conditions was narrowly based
  • Despite strong readings for sales and profits, businesses were still very reluctant to employ
  • “Construction surged again, propped up by high levels of building approvals that will drive construction activity for many months”
  • “Wholesale, a bellwether industry, also improved, but remains slightly negative”
  • Service industries “a stand out”
  • Mining and retail sectors were weakest
  • Structural challenges, political uncertainty and a high Australian dollar continued to weigh
  • Business confidence has been resilient for the better part of a year and conditions appear to be responding
  • “However, the composition of confidence may provide some cause for reservation about this optimism, at least in the medium term. Outside of construction, only retail is showing especially high confidence
  • Said soft wages growth, a rising unemployment rate and a decline in June quarter retail sales suggested that confidence may be tested
  • Rates on hold until late into 2015 but the chance of a cut is still rising
  • Calling for an unemployment peak at the end of 2014 of 6.5% (earlier forecast of 6.25%)

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AUD higher on this positive news … sellers still sitting on it, though