Why you should ignore the NAB business survey

Via UBS a few charts that sum it up the survey’s loss of traction with hard data:

In short, right now pretty useless.


  1. The 500 businesses that are surveyed are not a representative sample of +2million that operate within Australia

  2. Kormanator_T800

    NAB is living in an alternative world.

    Economists always look for incentives: Perhaps when NAB surveys they businesses they loan to, there is an incentive for the businesses to lie, telling the bank they borrow money from that business is good and getting better all the time.

  3. Its not useless, its just a conundrum that needs explaining.
    Why were correlations so strong in the past but now broken?
    Maybe something like this. Businesses are creaming it because of high population growth, is leading to higher sales and profits. Also the readily supply of labour and low inflation is keeping costs down. The Chinese continue to buy everything we can grow or dig up. Governments pouring money into infrastructure is bolstering engineering and construction companies.The boom conditions in Australia are going to the top 2% rather than the man in the street, who is struggling with no wage rises and over levered mortgages.

    • Yep, the consumer who represents over half of all economic activity in this country is tapped out but governments have stepped in to replace that. Except in the most directly related area of retail, which is languishing as John and Jane Average struggle with stagnant income growth and sky-high debt with now very limited ability to expand that debt further to keep consumption surging.

      More immigration means more consumption overall but if it’s reducing the size of the individual pie slices then perhaps many small/medium retailers are struggling to capture any real benefit with only certain areas and the big boys in a position to take advantage of more people who each spend less?