There was always going to be a little bounce back from the December crash:
Business conditions saw a moderate rebound in January after falling sharply in December. Some improvement was likely given the difficulty in addressing seasonality around the Christmas/New year period but even after this partial reversal, conditions and forward orders continue to trend lower and still show a sizeable decline over the past 6 months. There was no improvement in retail conditions. Confidence edged up but remains below average. The unusually sharp moves in conditions in South Australia and transport & utilities unwound somewhat in January. There was no rebound in NSW and Victoria – while SA and WA continue to lag. Of interest this month is a significant fall in capacity utilisation to levels only just above average. This may have implications for both future employment and capex plans. On the basis of this Survey and our forecasts NAB now expects the cash rate to remain unchanged for an extended period with downside risks (see: NAB change to cash rate call – February 2019).
Headline numbers rebounded a little:
