NAB’s monthly business confidence survey for April was is out and is relatively stable at the headline level but deteriorating internally:
Business confidence was unchanged in April, at relatively subdued levels. Until confidence lifts significantly it is difficult to see a sustained economic recovery developing – to date rate cuts have not appeared to do much and it will be interesting to see what if anything this week’s Federal Budget will do. Interestingly, falls in confidence were confined to a small number of industries (professional services and construction). While less negative than in the past, confidence in mining remain the weakest along with finance/ property/ business.
Business conditions retraced some – but not all of the gains reported in March. In trend terms, the recent upward trajectory of conditions remains intact and is broadly at levels consistent with average rates of activity over the history of the survey. All components of business conditions (trading, profitability and employment) weakened in April, with employment dipping back into negative territory. Changes in conditions varied considerably across industries in the month, with the recovery in the ‘bellwether’ wholesale industry proving short-lived and dropping back into negative territory. Construction also deteriorated, but remained positive, while mining was less negative in the month. Both the exports and orders index remain soft, while capacity utilisation and capex each eased back.
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