Australia: Floods drive confidence down into negative territory
February 17, 2011
The business sentiment index published by the National Australian Bank Ltd. (NAB) plunged into negative territory in December, falling to minus 3 points from plus 6 points in November. At the current level, business sentiment sits under the 0-threshold that separates positive from negative sentiment. According to the NAB, the Queensland floods of December and January, which have been estimated to have caused damages amounting to USD 20 billion, weighed on business confidence. In particular, deteriorating conditions within the mining, transport, agriculture and tourism sectors of the affected areas dragged sentiment into negative territory. A further decline in business confidence is expected in January as the negative impact of the floods wash through the economy.