We’ve seen a near uniform deterioration in private sector surveys across the board in the past six weeks but the NAB business survey out today has gone entirely the other way:
The very strong outcome in this month’s NAB Business Survey provides strong evidence that the non-mining recovery has not been derailed by the financial market volatility and escalation in global economic concerns earlier in the year. While the service sector is still a major driver of the recovery, this survey suggests that the improvements may be becoming more broad-based across the economy – particularly in construction and manufacturing.”
The latest Survey provides strong evidence that the Australian business environment has not only weathered global uncertainties, but appears to have strengthened. There are also signs that the non-mining recovery is becoming a little more broad-based. Consequently, our outlook for the economy remains fundamentally unchanged, with no more cash rate cuts expected, although recent statements from the RBA reinforced the point that were the non-mining sector to show any signs of weakening, lower inflation and AUD strength has increased the RBA’s willingness to lower rates.
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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.
