Last month’s surprise spike in business conditions was more than unwound in November, although that was partly expected. Despite the drop, business conditions remain well above the long-run average and are at solid levels across most of the economy. Forward orders were stronger as well. The construction industry is looking particularly good, but the retail sector is still lagging behind. Additionally, most states are seeing very solid business conditions, although WA is only moderately positive. The Survey’s employment index held steady at previous levels, pointing to adequate jobs growth that should further lower the unemployment rate. Wage costs picked-up this month, coinciding with reports from some firms that wage costs are impacting confidence. Last week’s National Accounts again highlighted the growing divide between the relatively upbeat business sector and seemingly restrained households. The NAB Survey suggests that trend may continue going into Q4, and we are continuing to watch the softer trends in confidence and the retail sector, as both can have significant implications for the outlook.
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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.
