Australia Business Confidence


Australia: Business confidence improves in June

July 8, 2014

The business sentiment index published by the National Australian Bank (NAB) improved from the 7 points tallied in May to 8 points in June, which marked the highest level in four months. The indicator moved even further above the 0-point threshold, which indicates that Australian businesses are optimistic regarding economic conditions in the coming months.

According to the NAB, businesses remain confident despite the government’s “tough budget”, because they are facing better business conditions, especially related to sales and profits. Accordingly, firms’ expectations regarding trading and profitability improved markedly in June as did their expectations regarding the situation of stocks. The NAB added that firms continued to, “report relatively benign inflation pressures, assisted by lower purchasing costs inflation and relatively low labour cost pressures.” NAB’s statement partly reflects the effects of the monetary easing cycle that the Reserve Bank of Australia began in 2012. However, firms are still worried about the situation in the labor market, as unemployment reached an over-decade high in June.

FocusEconomics Consensus Forecast panelists see fixed investment growing 0.1% in 2014, which is unchanged from last month’s forecast. The panel sees investment expanding 0.9% in 2015.


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Australia Business Confidence Chart

Australia Business Confidence June 2014

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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