Australia: Business confidence dips slightly in February but remains elevated
The business confidence index produced by the National Australia Bank (NAB) decreased from a revised 11 points in January (previously reported: +12 points) to 9 points in February, possibly influenced by financial market turbulence early in the month. However, the series still sat comfortably above its long-run average and the neutral 0-point threshold, indicating that Australian businesses are largely optimistic regarding economic conditions.
Looking at the sector-by-sector picture, the mining sector grew less optimistic in February, while the construction, transport and utilities, and manufacturing sectors became more optimistic. All sectors remain firmly in positive territory. In contrast to business confidence, business conditions rose to an all-time high in February, thanks to improved trading conditions, profitability and employment, and a surge in forward orders. In addition, although the capacity utilization rate dipped slightly, it remained elevated in February. This, coupled with buoyant sentiment, bodes well for business investment this year.