Australia: Business confidence rebounds in June
July 12, 2016
The business confidence index published by the National Australia Bank (NAB) rose from three points in May to six points in June. The indicator is now further above the 0-point threshold, which means that Australian businesses are relatively more optimistic regarding economic conditions in the coming months. The increase puts the figure in line with the long-term average of approximately six points.
According to the NAB, business confidence is reassuringly high given the disruptions facing the Australian economy. Strong business conditions have shielded business confidence from negative effects associated with the UK’s vote to leave the European Union and the Australian elections. The increase in confidence was broad based across industries, although the long term trend for the mining industry is still in pessimistic territory. Regarding the impact of the Brexit vote, NAB stated that, “Brexit is expected to have limited direct economic effect on Australia given Australian goods trade has re-oriented to Asia, although services trade and investment flows are larger.”
Author: Robert Hill, Economist