Australia: Business confidence falls to eight-month low in March
April 8, 2014
The business sentiment index published by the National Australian Bank (NAB) fell from 7 points in February to 4 points in March. The indicator is still, however, above the 0-point threshold, which indicates that Australian businesses are optimistic regarding economic conditions in the coming months.
Business confidence was mainly affected by sluggishness in business activity. The NAB acknowledged that a combination of factors are negatively affecting businesses' expectations. The still high value of the Australian Dollar (AUD) does not benefit the performance of the external sector, and adds to the already difficult conditions that the industry is facing. Moreover, the significant “belt tightening” expected to be introduced in the next budget was also considered as a factor affecting business optimism.
FocusEconomics Consensus Forecast panelists see fixed investment growing 1.2% in 2014, which is unchanged from last month's forecast. The panel sees investment expanding 1.6% in 2015.