BUSINESS SURVEY

INSIGHTS, TRENDS AND CASE STUDIES

Business conditions fell by 3 pts to +4 index points in February, driven by declines in profitability (now +1) and trading (+8) sub-indexes. Employment was unchanged at +5. Confidence fell 2pts in the month to +2 index points.

Confidence and conditions continue to ease

Business conditions saw a moderate rebound in January after falling sharply in December.

Business conditions continued to ease in Q4 and while they remain above average, forward looking indicators point to potential further weakness.

Conditions end the year on a concerning low.

The latest NAB business survey shows further weakness in business conditions.

Total NAB customer spending grew 7.0% y/y in Q3 2018 – up from 5.6% in the previous quarter and 3.0% in the same quarter a year ago.

The NAB Cashless Retail Sales Index gained 0.8% in October on a month-on-month basis, rebounding from a much weaker 0.2% in September.

Ivan Colhoun, NAB’s Chief Economist, Markets, talks through the findings in the latest NAB Business Survey.

In seasonally adjusted terms, at 0.3%, online retail sales slowed in September. The 12 months to growth rate is also slower.

Small and Medium Enterprise (SME) business conditions edged lower in Q3 2018 to +11, while SME business confidence fell to +2pts. While conditions have eased over the past two quarters, they remain well above average, though confidence has declined to below average levels.

Business conditions seem to have stabilised at high levels in recent months following some sharp falls earlier and the dip in confidence last month appears to have been temporary.

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