Australia: Business conditions collapsed, confidence remains steady – Westpac

Andrew Hanlan, analyst at Westpac, notes that Australia’s NAB business survey for December showed that business conditions have collapsed, with the largest monthly fall since the GFC.

Key Quotes

“The business conditions index fell by 9pts to be at +2, a below average reading (for the monthly survey, dating from March 1997). Conditions are down sharply from the first half of 2018, when the index averaged +18.”

“This is the softest reading since September 2014, prior to the recent strong housing upswing gathering a head of steam.”

“Business confidence was steady at +3, a below average reading, down from +9 on average in the first half of 2018.”

“If the December update is accurately describing conditions across the Australian economy then this is a watershed moment. For policy makers, economic growth forecasts of 3% plus would need to be marked materially lower.”