Australia: Both business conditions and confidence now at multi-year highs - NAB

Analysts at NAB note that the NAB Monthly Business Survey for Australia posted another strong result in April, with both business conditions and confidence improving – pointing to ongoing strength in business activity in the near-term.

Key Quotes

“In addition to elevated levels of business conditions, improvements appear to have become increasing broad-based across states and industries. Interestingly, conditions in Qld did not deteriorate as much as expected in the wake of Cyclone Debbie, although it did still fall appreciably. Importantly, the Survey points to an ongoing improvement in employment conditions – a trend that is critical to the likely path of the RBA’s cash rate.”

“While these results support our view that economic growth will accelerate in H2 2017, following disruptions in Q2 from Cyclone Debbie, the longer-term economic outlook is somewhat less certain as important growth drivers (LNG exports, commodity prices and housing construction) begin to fade. Despite that, the RBA’s emphasis on financial stability concerns is expected to keep them on hold for the foreseeable future.”