Australia: Weakest business conditions in five years – ANZ

Catherine Birch, senior economist at ANZ, notes that the Australian business conditions deteriorated to 0.5 points in August, the weakest result since September 2014.

Key Quotes

“Profitability fell to its lowest since late 2013 following very soft non-mining profit growth of 0.3% q/q in Q2 (1.5% y/y). Trading and forward orders both weakened. Capacity utilisation jumped 1ppt but it has been extremely volatile over the past few months. The employment index recovered almost to its long-run average, and labour costs rose.”

“There was a bounce in retail business conditions in August but it remains the weakest industry at -16.3. Manufacturing saw a small improvement as well, but it also sits in negative territory at -6.5. The other industries all recorded declines in conditions during the month. Only mining and finance sit above their long-run averages (using three-month averages).”