Australia: Business level stable in January
February 9, 2016
The business sentiment index published by the National Australia Bank (NAB) remained unchanged in January, from December’s two points. January’s reading maintains the indicator above the 0-point threshold, which means that Australian businesses are optimistic regarding economic conditions in the coming months.
The NAB mentioned that the business confidence was heterogeneously distributed across the country, with Western and South Australia suffering worsening conditions from the mining slowdown. This is a mixed signal, as although it suggests that effects of the slowdown are spreading, the non-mining sector is picking up the slack and offsetting the deterioration in its counterpart. The NAB noted that “mining confidence is lowest and is expected to remain weak, while construction confidence is the highest – a reflection of the extremely large residential construction pipeline.” Aside from the mining sector, the retail sector also showed a sizeable decrease, while construction showed the strongest gains, likely attributable to Australia’s strong residential housing market.
Author: Robert Hill, Economist