It’s pre-bushfires and coronavirus but it was weak anyway, from NAB:
Key messages from the Survey: The final monthly business survey of 2019 provides further evidence that activity stabilised in Q4. Conditions edged 1pt lower in the month to +3 index points – another below average result and one that is well below the level seen in early 2018. Confidence weakened, falling 2pts to -2 index points, the lowest read since mid-2013. While broadly stable, forward looking indicators do not imply a material improvement in the near term. Forward orders remain weak and capacity utilisation is just below average. Capex has pulled back over the year, and is now also below average. A bright spot remains the employment index, which at +4 index points is above average and implies reasonable ongoing employment demand. While the deterioration in conditions since mid-2018 has been broad-based, NSW and Vic currently see the best conditions on the mainland, as do the service industries. Retail has improved slightly over recent months, but remains deeply in negative territory and, alongside wholesale, the weakest of all industries. Notwithstanding the decline in confidence, the impact of the bushfires (which began in late December) is not yet apparent in these results. We will closely watch the results of the January survey for any indication of the impact of the fires on the business sector.
Soft capacity and capex:
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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.
