NAB Quarterly ASX 300 Business Survey – Q3 2015

Business conditions among Australia’s ASX 300 firms rose to a new survey high of +20 points (up +12 from +8 points in the previous quarter). The gap between very big and small business is now at its widest margin since this survey began.

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Business conditions among Australia’s ASX 300 firms rose to a new survey high of +20 points (up +12 from +8 points in the previous quarter). The gap between very big and small business is now at its widest margin since this survey began. 

Against that, business confidence slipped across all industries to be lower than the levels reported in NAB’s main Quarterly Business Survey (which covers the broader economy) & SME surveys.  In terms of capital expenditure, fewer non-mining firms are planning to increase cap-ex in the next 12 months.

According to NAB Group Chief Economist Alan Oster: “ASX 300 business conditions subcomponents improved sharply over the quarter, with trading conditions out-performing, reaching a new survey high of +30 points (+21 previously). Profitability improved from +13 to +20 points”.

After many consecutive quarters in the red, overall employment conditions turned positive, rising to +6 points (-5 previously). However, employment conditions continue to vary widely across industries.

According to Mr Oster: “Retail, transport/utilities and finance/banking/property were the only sectors to report a positive overall result in Q3, with employment conditions negative in all other industries, led by construction”.

Business confidence among Australia’s largest firms deteriorated notably in Q3, down -11 to -4 points. Confidence weakened in all industries and was overall weakest in construction and mining.

“It should be noted that this survey took place prior to the change in leadership of the Federal Government,” Mr Oster said.

Capital-expenditure edged down in Q3 but was overall strong at +14 points (+20 previously).

Non-mining cap-ex eased but remained high at +19. In contrast, mining cap-ex improved slightly but remains in negative territory.

“Looking forward, fewer non-mining firms are planning to increase cap-ex in the next 12 months, while more mining firms are planning to cut back. This is in contrast to the main Quarterly Business Survey,” Mr Oster said.

Large firms reported slightly higher overheads and labour costs in Q3, but purchase costs were broadly unchanged. Lower final product prices may suggest discounting by large firms.

Looking ahead, ASX 300 firms may be anticipating lower domestic demand as forward orders, export orders and stock levels all fell.

For further analysis download the full report.

ASX300 Quarterly Business Survey – Q3 2015 (PDF, 274KB)