Australia: Businesses confidence rises in July despite deteriorating business conditions
The business confidence index produced by National Australia Bank (NAB) rose to plus 4.0 points in July from June’s 2.2 points. In turn, the index moved further above the zero-point threshold, indicating that Australian businesses were mostly optimistic regarding economic conditions going forward.
July’s strengthening was broad-based, with sentiment in retail sector leading the charge, likely boosted by the government’s tax cuts. Overall, the mining, finance, and business and property services sectors remained the most optimistic in July, while sentiment in manufacturing, and recreation and personal service remained the lowest.
Meanwhile, business conditions weakened in July, chiefly due to deterioration in the employment sub-indexed. Furthermore, despite improving slightly, forward orders were stuck in negative territory, while trading conditions softened. Lastly, profitability showed signs of improvement in July, albeit only marginal.