ECONOMIC COMMENTARY

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

BUSINESS surveys

The NAB Cashless Retail Sales Index gained 0.5% in June on a month-on-month basis, following gain of 0.6% in May (revised from 0.8%).

The business conditions index ticked up by 1pt to +15 index points in June, after easing in the previous month. The business confidence edged down 1pts to +6 index points, to be around its long-run average level.

NAB Online Retail Sales Index (NORSI) slowed slightly in May (+1.2% mom s.a.) from stronger growth in April (1.6%). 12 months to growth was also slower in May, with sales up 17.2% compared to April’s 12 month to growth of 18.4%. While slowing, trend online retail sales is still much stronger compared to the same period a year ago.

INSIGHTS, TRENDS AND CASE STUDIES

The NAB Cashless Retail Sales Index gained 0.5% in June on a month-on-month basis, following gain of 0.6% in May (revised from 0.8%).

The global economy remains in reasonable shape right now despite some pressures on Emerging Market economies.

CoreLogic’s national housing market index showed a remarkable reversal in housing market conditions over the past year.

The NAB Residential Property Index fell sharply in the June quarter 2018, down 17 points to +6 to sit at its lowest level since mid-2016 and well below its long-term average (+14).

Forecasts broadly unchanged but new risks to watch.

The business conditions index ticked up by 1pt to +15 index points in June, after easing in the previous month. The business confidence edged down 1pts to +6 index points, to be around its long-run average level.

The NAB Rural Commodities Index gained 1.4% month on month in June, following a 3.1% gain in May. On a year on year basis, the index was down 2.9% in June. The monthly gain reflects strong lamb, wool and cotton prices.

Risk to world growth from trade tensions escalating.

NAB’s USD non-rural commodity price index declined by over 3% q/q in Q2 2018. This only partially reversed the large gain made in the previous quarter and, as a result, it is still 7.5% higher than a year ago. The fall in Q2 mainly reflected a decline in iron ore and metallurgical coal prices, although LNG export prices – linked to the price of oil – rose.

New research released today by NAB shows electricity and roads have the biggest impact on our daily lives – affecting almost 1 in 2 people (either positively or negatively).

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