National Australia Bank Business Survey for March

Business Confidence 3

  • prior was 0

Business Conditions 6

  • prior was 2

A pick up in both measures!

  • Capex index comes in at +9, its highest since 2011
  • Retail confidence in negative zone, for the first time since the middle of 2013

Comments from NAB Chief economist Oster:

  • "level of conditions is pointing to a slightly above average rate of activity"
  • By industry, there was a surprisingly strong improvement in conditions for the 'bellwether' wholesale industry
  • While construction improved significantly as well
  • In contrast, mining and retail were the only industries to record a (slight) deterioration
  • The export index is yet to respond to the more favourable AUD
  • Orders are soft (and down slightly)
  • Capacity utilisation and capex, encouragingly, both improved

"There were some tentative signs of improvement in the NAB Monthly Business Survey for March - with the post RBA cut fall in confidence reversed in March. Surprisingly, the lift was particularly pronounced in mining, although confidence is still lowest for this industry. Elsewhere outcomes were mixed, suggesting some industry specific factors are also at play. Transport & utilities posted the second largest gain, while retail and manufacturing were the only industries to deteriorate."

"In March business conditions recorded a notable lift, with each component (trading, profit, employment) posting an improvement - although employment continues to be relatively muted. This level of conditions is pointing to a slightly above average rate of activity, although the trend is somewhat softer. If maintained it could well boost confidence further. By industry, there was a surprisingly strong improvement in conditions for the 'bellwether' wholesale industry, while construction improved significantly as well. In contrast, mining and retail were the only industries to record a (slight) deterioration. The export index is yet to respond to the more favourable AUD, while orders are soft (and down slightly). Capacity utilisation and capex, encouragingly, both improved."

NAB still see another RBA rate cut in coming months (but just one, not two).

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Ladies and gentlemen of ForexLive .... this is an encouraging report from Australian business. Tentative signs still, yes, but much better than recent results.