Just to make things interesting, the May NAB business survey is out today and amid general dross shows some green shoots:
The recent Federal Budget and interest rate cut appears to have had a positive impact on business confidence – which moved up significantly in May – from +3 to +7 index points. This is the highest level of confidence since August 2014 and has helped to turn the trend more positive. Confidence was significantly higher in retail / wholesale (possibly associated with expectations from the Small Business Package) and finance, business and property services. Mining confidence, on the other hand, fell significantly (to -30 points).
The pick-up in confidence could also reflect improved business conditions. Business conditions rose from +4 to +7 points in May (and the highest read since October 2014), further cementing the upward trend seen over recent months. All components of the conditions index (trading, profitability and employment) improved in the month, although a meaningful recovery in employment remains absent – the index is still negative. Conditions vary greatly across industries and a number reported a deterioration – again the largest fall was in mining. Conditions remain most positive in service sectors. The ‘bellwether’ wholesale industry improved, but remains weak (transport was weak also). Encouragingly, leading indicators such as forward orders improved, as did capacity utilisation and capex spending.
Here are the internals:
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
The recent Federal Budget and interest rate cut appears to have had a positive impact on business confidence – which moved up significantly in May – from +3 to +7 index points. This is the highest level of confidence since August 2014 and has helped to turn the trend more positive. Confidence was significantly higher in retail / wholesale (possibly associated with expectations from the Small Business Package) and finance, business and property services. Mining confidence, on the other hand, fell significantly (to -30 points).
improved business conditions. Business conditions rose from +4 to +7 points in May (and the highest read since October 2014), further cementing the upward trend seen over recent months. All components of the conditions index (trading, profitability and employment) improved in the month, although a meaningful recovery in employment remains absent – the index is still negative. Conditions vary greatly across industries and a number reported a deterioration – again the largest fall was in mining. Conditions remain most positive in service sectors. The ‘bellwether’ wholesale industry improved, but remains weak (transport was weak also). Encouragingly, leading indicators such as forward orders improved, as did capacity utilisation and capex spending.
