Australia: Business confidence falls in August although remains in optimistic territory
September 12, 2018
The business confidence index produced by National Australia Bank (NAB) decreased to 4.0 points in August from 6.6 points in July. The index 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 construction and mining sectors were the most optimistic, while the manufacturing, and transport and utilities sectors were the least optimistic. Nevertheless, all sectors remained in positive territory. Meanwhile, business conditions improved in August on the back of an improvement in trading conditions and profitability. The employment index remained unchanged and indicates unemployment will edge lower in the months ahead. Forward orders grew and moved further into positive territory, while capacity utilization also inched up in August. All-in-all, business conditions strengthened and moved further above their long-run average, which bodes well for non-mining business investment this year.
Australia Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists expect fixed investment to expand 2.6% in 2018, unchanged from last month, before decelerating slightly to 2.2% in 2019.