Powered by MOMENTUM MEDIA
subscribe to our newsletter

Business conditions ‘unwavering’, says NAB

Business activity appears to be continuing its recovery, but there is still some uncertainty within the marketplace, according to NAB.

NAB’s Monthly Business Survey for May 2016 found business conditions remain at a “very elevated level”, unchanged at +10 index points for that month, which is well above the long-run average of +5.

NAB chief economist Alan Oster said the survey suggests further improvement for the non-mining sectors of the economy going into the second quarter of the year.

The survey showed that most industries recorded an improvement in business conditions for May, due to a notable uptick in sales and profitability which offset a moderation in employment demand.

“Service industries continue to lead the way, which now includes distributional services such as retail, but mining and construction remain quite weak, which is partly a reflection of the ongoing downturn in spending on resource projects,” Mr Oster said.

Advertisement
Advertisement

The survey indicated that firms are reporting lower levels of confidence despite elevated business conditions. NAB’s business confidence index eased by 2 points to +3 index points in May, pushing the index further below its long-run average.

“The RBA’s cut to interest rates did not help lift business confidence as we had hoped, even as sales activity continues to improve,” Mr Oster said.

“Uncertainty around the upcoming election might be a factor here, but mixed results across industries suggest that other factors are at play."

The survey said that with business activity indicators resilient, the Reserve Bank is likely to concentrate its attention on the inflation outlook.

Without a very weak Consumer Price Index result for the second quarter, these positive activity trends are “likely to keep the RBA [cash rate] on hold”, it said.

PROMOTED CONTENT


NAB said that overall, the survey results provide confidence in the bank's near-term outlook for the economy, which sees the non-mining recovery remaining on track.

[Related: Business conditions recover in February]

Business conditions ‘unwavering’, says NAB
mortgagebusiness

Latest News

The RBA has studied the role of collateral in credit markets under stress, and has found that collateralised borrowing rose for some segment...

Auction volumes surged significantly over the December quarter across Australia, largely attributed to a “resurgence” in Melbourne, acco...

Loan conditions and collateral guarantees continue to be major stumbling blocks for small businesses looking to access financing, according ...

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.