Australia: Business sector continues to look upbeat - NAB

The Australian business sector continues to look upbeat, both with respect to current business activity – also evident in the NAB Monthly Business Survey – and importantly, the near-term outlook, notes the analysis team at NAB.

Key Quotes

“While movements in leading indicators were somewhat mixed this quarter, overall they point to a continuation of the recent strength, which is feeding into solid employment and investment intentions. Non-mining business investment remains crucial to the outlook, so it is encouraging to see that the index for capex plans over the next 12 months is holding up at solid levels.”

“Similarly, firms are saying that their hiring intentions for the very near-term are higher than last quarter, while intentions for the next year are holding up near multi-year highs. The strength we have seen in business conditions has been relatively broad based across industries, and we are seeing some of the previous underperformers lift. That said, there are mixed signals from the retail sector which warrant close monitoring given the importance of consumption to economic growth. In that respect, it is reassuring to see some tentative signs of a lift in wage pressures in the Survey.”