Australia: Business confidence drops to almost three-year low in November
The business confidence index produced by National Australia Bank (NAB) declined to 3.2 points in November from October’s revised 4.5 points (previously reported: 4.2 points). The index thus moved below its long-run average and nevertheless remained above the zero-point threshold, indicating that Australian businesses are largely optimistic regarding economic conditions.
Looking at the sector-by-sector picture, the mining sector was the most optimistic by far, followed by the manufacturing and construction sectors. The retail sector, on the other hand, was again the least optimistic, due to the sector’s recent weak performance. That said, the construction, transport, manufacturing and mining sectors saw worsening conditions in November. Meanwhile, business conditions also weakened in November, as a result of a deterioration in trading conditions and profitability, only partially offset by more positive employment expectations. The positive reading for the employment index indicates unemployment will continue to decline in the months ahead, although the pace of job creation is set to soften. The index on forward orders declined and moved below the long-term average, while capacity utilization edged up in November. All-in-all, business conditions deteriorated but remained above their long-run average, which will likely translate into a reasonable but weaker level of activity.