Australia: Business confidence gains ground at the start of the year
The business confidence index produced by National Australia Bank (NAB) rose to 3.6 points in January from a revised almost three-year low of 2.7 points in December (previously reported: 2.8 points). The index thus moved further above the zero-point threshold, indicating that Australian businesses are mostly optimistic regarding economic conditions. However, it remained below its long-run average.
Looking at the sector-by-sector picture, confidence remained highest in transport and utilities, and construction, while it was weakest in personal and recreation services, and finance, business and property services. Meanwhile, business conditions improved significantly in January, as a result of better trading conditions, profitability and employment expectations. Moreover, the index on forward orders rebounded and moved to expansionary territory. However, capacity utilization declined further in January. All-in-all, worsening business conditions point to a strengthening level of private-sector activity.