National Australia Bank Business Survey, February

Business conditions 21 ... doing well ... to a record high

  • prior 18, revised from 19
  • Long run average of this is 5
  • Conditions strongest in construction, mining, finance, and property & business services
  • Retail sector - highest reading in 8 months

Business confidence 9

  • prior 11, prevised from 12
  • NAB citing concerns over financial market volatility impacting on this measure of sentiment

Some of the sub indices:

  • profitability+2 points to +21
  • sales index +3 points +27
  • employment index +10 to +16 )16 is a record high for this)
  • forward orders +3 to +11

NAB comments

  • strength in activity broad-based
  • all major industry groups reporting above-average conditions,
  • If the recent surge is sustained, the employment index points to a robust level of jobs growth of approximately 27,000 per month
  • Historically, NAB Business Survey employment has tended to lead the official data by six months
  • suggests that the strength in employment growth will not be ending any time soon

NAB chief economist Alan Oster:

  • new orders at this level is consistent with non-mining domestic demand growth approaching 6 percent
  • The strength in business conditions and leading indicators makes us more confident that Australia will see stronger economic growth in coming quarters

Reserve Bank of Australia implications:

  • We expect by late 2018 the RBA will feel relaxed enough about the domestic fundamentals to cautiously start withdrawing the stimulatory policy stance it is currently running

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AUD edging a little higher, expect the first resistance level to give way soon

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For more on this, background etc: