Australia Business Confidence January 2019


Australia: Business confidence gains ground at the start of the year

February 13, 2019

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.

Australia Fixed Investment Forecast

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 2.2% in 2019, unchanged from last month’s estimate, before accelerating slightly to 2.5% in 2020.

Author: Massimo Bassetti, Senior Economist

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Australia Business Confidence Chart

Australia Business Confidence January 2019

Note: Index of business sentiment; 0-point threshold indicates equal number of positive and negative responses.
Source: National Australia Bank’s Monthly Business Survey.

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