Australia: Businesses confidence drops in August; business conditions at close to five-year low
The business confidence index produced by National Australia Bank (NAB) dropped to plus 1.4 points in August from July’s 3.8 points. The index nevertheless remained above the zero-point threshold, indicating that Australian businesses were mostly optimistic regarding economic conditions going forward.
In terms of sectors, mining companies enjoyed the highest levels of confidence. On the other hand, sentiment in the retail sector remained weak, despite a jump in the month. Lastly, sentiment in construction and manufacturing was also weak, likely weighed down by subdued domestic demand and a weak residential construction sector.
Similarly, business conditions worsened in August to their worst level in close to five years. This was chiefly due to deteriorated trading conditions and profitability, as well as to more negative forward orders. On the flip side, capacity utilization improved, as did the employment sub-index.