Business conditions have remained steady in Australia, which has disguised stark state-by-state differences, according to a monthly survey by NAB.
The survey found that business conditions declined by one point to +4 during December 2014 – above the long-run average of 0, which dates back to 1989.
The decline in business conditions was evident across three components: trading conditions, which fell from +10.5 to +9.5; profits, which fell from +5 to +4; and employment, which fell from 0 to -1.
Business conditions were mixed across the six states, with Victoria and New South Wales reporting above-trend conditions at +7 and +5 respectively.
There was a loss of momentum for conditions in Western Australia, moderating to +3, while the conditions index was at or around zero in Queensland, South Australia, and Tasmania.
The survey also showed that the business confidence index increased by one point to +2, but still remains below the long-run average of +5.
Andrew Hanlan, a senior economist at Westpac, said the survey results show “a patchwork economy with little to no momentum building”.
“By way of historical context, the conditions index strengthened during the second half of 2013 from around -6 as the economy responded to RBA rate cuts,” he said.
“However, in 2014, conditions trended sideways from +3 in January to +4 in December, to average +3 for the year.
“This lack of domestic momentum is against a backdrop of global weakness, stability in official interest rates and a tightening of fiscal policy,” said Mr Hanlan.