National Australia Bank Business Survey for March

Uh-oh ....

While there is no expectations survey for these two indicators we have become accustomed to improvements in the 'conditions' part ... but none for this today!

  • Business conditions 14 (prior 20, revised from 21)
  • Business confidence 7 (prior 9)

business conditions

  • well above its historical average

business confidence index

  • now only just above its historical average of 6 index points

Alan Oster, NAB Group Chief Economist

  • "Not only do the well above average business conditions continue to point to robust business activity in Australia, it is also broadly based as conditions were equal to, or above, their historical average in all industries."
  • the employment index is consistent with a solid level of jobs growth of around 21k per month.

Trading conditions (sales), profitability and, in particular, employment conditions all fell

  • However, on a trend basis there was little or no change and all components remain above average

Leading indicators softened this month

  • capacity utilisation easing slightly
  • forward orders gave up much of last month's spike
  • on a trend basis they both remain at multiple year highs, a positive sign for the non-mining economy, including employment and investment growth

More:

  • retail continues to underperform, on a trend basis it reached its highest level in nine months
  • Final product price inflation remains muted and retail prices declined

Oster in conclusion:

"The Survey results for March do not change our outlook for the Australian economy. The strength in business conditions and leading indicators are consistent with stronger economic growth in coming quarters and the Survey employment index is pointing to strong jobs growth which should reduce unemployment, and put gradual upwards pressure on private sector wages. We expect that towards the end of this year the RBA will be in a position to start increasing the current emergency low policy rate although it will depend heavily on the data flow - particularly for wages and inflation - and the risk is that any action by the RBA will be delayed"

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For background on this, check out the preview earlier: