From NAB:
The Australian economy appears to be performing better than many had expected, and this month’s business survey gives no signs that this is wavering. The NAB Business Survey showed a notable improvement in business conditions during February, jumping to +8 points, more than unwinding the decline from last month, which was primarily driven by Australia’s mining states. Conditions remain particularly robust in service based industries, which are leading the way in what has proven to be a resilient recovery in the non-mining economy. All three components of conditions (trade, profit and employment) improved during the month, and it was particularly encouraging to see employment move back into positive territory after showing mild signs of faltering recently – although it still suggests softer employment growth than the official labour market statistics.
• Forward indicators were more positive as well. Capacity utilisation, which provides a useful measure of the underlying health of the economy, jumped to 81.5% in February – its highest level since early 2012, and is above long-run average levels. This is consistent with a pick up in the capex index, which hit its highest reading in nine months. Forward orders were also stronger, lifting to well above average levels, suggesting a pick up in growth momentum in the near term. Despite the lift in conditions and some apparent respite in financial markets, business confidence simply held steady at the subdued – albeit positive – levels seen in recent months. Across industries confidence remains quite mixed, although all but two (mining and wholesale) were positive .
