Australia: Business confidence plummets in August
September 12, 2017
The business confidence index produced by the National Australia Bank (NAB) fell to 5 points in August, down from 12 points in July, which had marked the highest level since early 2008. The indicator now sits below its long-term average of 6 points but is still far above the 0-point threshold, which indicates that Australian businesses are optimistic regarding economic conditions in the coming months.
According to the NAB, the drop in business confidence was due to outside factors, most notably the escalating situation on the Korean peninsula, as well as to domestic factors including lower demand, margins, government policy and costs. Business conditions, on the other hand, improved in August as trading and profitability remained high compared to their long-run averages. Employment ticked up as well. Healthy labor market dynamics suggest the unemployment rate could fall further going forward.
Author: Lindsey Ice, Economist