NAB: Business Confidence Weak & Fragile
Australian business confidence was “very weak and likely fragile” in August, reversing many of the previous month’s gains according to NAB.
Sentiment reflected a weakening in the local employment index (down 11pt), mirrored by trading (down 3pts) and profitability (down 4pts).
Whilst conditions fell sharply in sectors such as mining and manufacturing, conditions remain “most favourable” in retail, followed by wholesale.
NAB attributes attitudes to uncertainty around the global coronavirus pandemic, including domestic eopening plans.
The impact of Melbourne’s stage four lockdowns also eroded business conditions in August, however, NAB asserts it was “not as bad as feared.”
Capacity utilisation remains around 5ppt below the long-run average, with all industries below average, and only WA and TAS rebounding to pre-COVID levels.
During the month of April, business confidence jumped 6pts to -8 index points, however, NAB warns it is likely fragile.
Business conditions dipped 6pts to -6 index points.