Powered by MOMENTUM MEDIA
subscribe to our newsletter

‘Upbeat’ business sector contrasts with ‘disheartened’ household sector

The question of how a disparity between “elevated” business conditions and a “disheartened” household sector will be resolved is “critical”, a business report has revealed.

The NAB Monthly Business Survey for May 2017, released earlier this week, remarked upon improvements in employment growth and a slight drop in business conditions to +12 index points, comfortably above the long-run average of +5.

Further, all industries reported positive business conditions during May, only the second time this has happened since 2010. The mining industry was found to have “bounced back considerably” in recent months, supported by elevated commodity prices.

Business confidence was also marginally above the long-run average, at +7 index points, but has fallen by 6 points since April – revealing that it is “less buoyant” than in April.

NAB said that this suggested there are “some peripheral factors still weighing on firms’ perceptions of the operation environment”.

Advertisement
Advertisement

Alan Oster, NAB’s chief economist commented of business conditions: “The business sector is looking quite upbeat, maintaining the apparent disconnect with a rather melancholy household sector.”

Mr Oster also observed softness in retail, but pointed to softer trends in the household sector as a possible contributing factor. He commented: “Solid outcomes from the NAB Monthly Business Survey signal a divergence in conditions between the business and household sectors of the economy. How the disparity resolves itself will be critical to the outlook for growth.”

Mr Oster added: “Optimists might point to solid employment conditions as providing the much-needed catalyst to lift the household sector out of its current funk. However, significant structural headwinds still pose a hurdle that will prove difficult to overcome, keeping wages growth subdued and consumers cautious with their spending.”

NAB predicts economic growth will accelerate in the second half of 2017, however there is uncertainty looking further into the future as growth drivers like LNG exports, commodity prices and housing construction begin to weaken.

[Related: Delinquency rates on the rise in 2017]

PROMOTED CONTENT


‘Upbeat’ business sector contrasts with ‘disheartened’ household sector
mortgagebusiness

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Latest News

Reverse mortgage lenders have accessed a small fraction of the potential retiree housing market in Australia, according to Deloitte. ...

Pepper Money has priced its second I-Prime deal for the year, upsizing the figure to $850 million. ...

The LMI provider has announced a new CFO following the resignation of its current CFO, effective 24 September. ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.