Australia: NAB Business Survey

Business Conditions Marginally Soften in April

Bottom line:

In April, there was a slight decrease in Australian business conditions, with a decline of 2 points to reach a positive value of 14. Despite this slight softening, the overall conditions remain high and significantly above the average levels seen in the long run. Various aspects of the survey showed a slight easing. Price pressures displayed a mixed trend during the month, but on average over the past three months, they have continued to normalize after reaching their highest points.

Key numbers:

Business conditions +14 (from +16)Business confidence 0 (from -1)Trading conditions +20 (from +24)Profitability +11 (from +13)Employment +11 (from +10)Forward orders +1 (from +3)Exports +1 (from +1)Capacity utilisation 85.1% (from 85.1%)

Details:Surveyed business conditions eased -2pts to +14 in April, but remained well above the long-run average (c.6pts). Business confidence edged higher to 0 (from -1).

Compositionally, key components of the survey eased marginally in the month but remained solid overall. Trading conditions (-4pts to +20) and profitability (-2pts to +11) both eased slightly, while employment rose a touch (+1pt to +11). Forward orders fell -2pts to +1, while capacity utilisation remained unchanged at 85.1%.

By industry, business conditions rose sharply in transport & utilities and wholesale trade, while declining sharply in recreation & personal services. Looking through the volatility, business conditions remain strong across the board in level terms.

Measures of price pressures were mixed in the month. Labour costs remained steady at +1.9%qoq, while purchase cost rose +40bp to +2.3%qoq. That said, overall final product prices eased 20bp to +1.1%qoq, with retail prices easing 30bp to +1.4%qoq.

Source: www.finlogix.com

Looking through the volatility, measures of price pressures continue to normalise

Source: Goldman Sachs Global Investment Research, NAB

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