Business confidence and conditions have remained resilient despite reeling back in August – supported by positive forward orders, subdued cost pressures and more stable consumer confidence.
According to the NAB Monthly Business Survey, the business conditions index dropped 4 points in the month after a 5 point increase in July, while the business confidence index dropped 2 points during August.
A sharp drop in profits and sales drove the unwinding in August, although NAB remains positive. Both business conditions and confidence are still stronger than they were this time last year.
“The jump in business conditions last month was surprising, so some payback in August was expected. The conditions index unwound most of July’s narrowly based gains – manufacturing, construction and retail fell most,” NAB said.
“At this level, business conditions are still well up on 2013, but are significantly lower than the pre-GFC years and slightly below the long run average of the series (+5 since 1997) – suggesting the moderate economic growth environment is set to continue.”