ECONOMIC COMMENTARY

Towards the future of the Australian, Asian and global economies: latest updates on domestic, international and industrial trends from NAB Group Economics.

LATEST updates

The strength witnessed in last month’s NAB Monthly Business Survey continued into January, with both business conditions and confidence jumping to much higher levels.

Australia’s service sector already accounts for 70% of our GDP and shows no sign of slowing its growth. That means it’s never been more important to understand the where, what and how of Australia’s most important economic driver. NAB crunches the numbers for you.

Business confidence has held up quite well and is remarkably steady given the context of major uncertainties both at home and abroad. That said, the level of confidence has not picked up to reflect the overall strength in business conditions seen over the past year or more.

According to the most recent surveys, business conditions and household sentiment are solid, and on an upwards trend.

INSIGHTS, TRENDS AND CASE STUDIES

Australians and businesses overwhelmingly think our country is a great place to live and have a business. However, Australian consumers and businesses are anxious about what the future holds.

Commercial property market sentiment has continued to build on the positive gains seen in our last survey. NAB’s Commercial Property Index rose 5 points to +21 in Q4 – its highest level since the Survey began in early-2010.

For the 2016-17 season, we developed a new wheat production forecast model, based on regional rainfall and state yields going back to federation, with an allowance for technological change.

Business surveys and measures tracking the volume of activity suggest that the global economic upturn lifted a notch toward the end of last year and that trend seems to have continued into early 2017.

New data released by NAB today indicates that spending on consumption-based goods and services by NAB customers grew 3.1% over the year to Q4 2016.

Low-tier SMEs’ business conditions now comparable to that of their mid-tier and high-tier counterparts

Brighter signs suggest moderate global reflation continues

NAB Economics changes cash rate view to one 25bp cut in late 2017.

Stronger near-term momentum will keep RBA on hold, but 2018 still a worry.

Get the latest monthly update on housing market conditions around Australia.

The RBI, somewhat surprisingly, maintained the policy repo rate at 6.25%. Uncertainty about the effects of demonetisation and sticky core inflation were factors.

The strength witnessed in last month’s NAB Monthly Business Survey continued into January, with both business conditions and confidence jumping to much higher levels.

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