Australia: Business sentiment turns negative in August
September 13, 2011
The business sentiment index published by the National Australian Bank (NAB) plunged from plus 2 points in July to minus 8 points in August. The reading marked the largest drop in the index since December 2009 and drove business sentiment to the lowest level since April 2009. With the August decline, business confidence fell below the 0-threshold, which separates positive from negative opinion, for the first time since the Queensland floods in December 2010. The result hints at deteriorating prospects for investment going forward. According to NAB, concerns regarding the global economic outlook and turmoil in international financial markets weighed heavily on the August reading. At a sector level, confidence dropped most in the finance/business/property sector, where sentiment plunged 17 points over the previous month. The highest confidence level can be observed in the mining sector (+18 points). Meanwhile, manufacturing marked the lowest level (-17 points), as a strong Australian dollar continues to negatively affect sentiment in this sector.
Author: Armando Ciccarelli, Head of Data Solutions