Powered by MOMENTUM MEDIA
subscribe to our newsletter

Business conditions hit nine-year high: NAB

The business sector is enjoying a “multi-year high” with economic growth tipped to rise in the second half of 2017, according to NAB Group Economics.

Rising by 4 points from May to +15 points, the business conditions index hasn’t been this high since “around pre-GFC levels”, the latest NAB Monthly Business Survey revealed.

“We continue to be pleasantly surprised by just how upbeat the business sector is, given the context of a fairly beleaguered household sector that has been weighed down by limited wages growth and record levels of debt,” said NAB chief economist Alan Oster.

“In fact, there is even tentative evidence that we are now starting to see some positive spill-overs from the business sector to the broader economy,” he said.

Business confidence has risen slightly by 1 point this month, but remains well above long-term average levels.

Advertisement
Advertisement

The two biggest drivers of business conditions were stronger trading conditions and profitability, rising from +11 to +15 and +15 to +21 respectively, with the highest performing industries being wholesale, construction and manufacturing. 

Performing better than expected was the retail industry, while mining was “once again” the worst performer in the month of June.

With employment conditions steady at +7 points, Mr Oster said that they remained at “levels that would indicate enough employment growth to lower the unemployment rate over coming months.”

NAB senior economist James Glenn told Mortgage Business' sister title InvestorDaily that while he expected the RBA to hike the cash rate in mid-2019, continued improvements in the data could indicate a greater risk that the RBA would hike sooner.

However, consumer spending in the long-term continues to be stifled by “ongoing slack in the labour market” as well as “record levels of household debt”.

PROMOTED CONTENT


Although business conditions are improving, Mr Oster said it may not meet long-term expectations.

“We expect economic growth to rebound from temporary disruptions in H2 2017, but the longer-term outlook could easily underperform the RBA’s upbeat expectations as important growth drivers (LNG exports, commodity prices and housing construction) begin to fade,” Mr Oster said.

[Related: Sentiment drops over accessibility of debt finance]

Business conditions hit nine-year high: NAB
mortgagebusiness

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

Third parties should be given “action initiation”, the final report into the Inquiry into Future Directions for the Consumer Data Right ...

Properties in the Tasmanian capital continue to have the highest rate of profitability, according to new research. ...

The global bank has merged the wealth management teams in global consumer banking and institutional clients divisions to form a single wealt...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: A new record in mortgage approvals

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

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