The picture painted by the first survey of 2020 is broadly similar to that at the end of 2019. While there has been no significant deterioration in overall terms – despite some state and industry evidence of a bushfire impact – the survey continues to suggest very little / to no growth in the private sector. In the month, conditions were unchanged +3 index points – continuing their below average run since April last year. Confidence edged higher but remains weak after reaching its lowest level since mid-2013 last month. A similar pattern across industries continues, with services still outperforming and goods distribution soft. There also appears to have been some impact – albeit only moderate – of the bushfires with conditions lower in NSW and Vic as well as rec & personal services in the month. Looking forward, businesses themselves do not anticipate a material improvement with forward orders still weak (and negative) and capacity utilisation having fluctuated around its average in recent months. Of note this month is the decline in the employment index, which had previously held up and at +1 is now just below average and implies employment growth of around 16k per month. Somewhat slower than recent labour market outcomes. We have not provided an in depth theme this month, but will release the results of a special bushfire related survey in coming weeks.
Forward indiicators are bumping along the bottom:
The full text of this article is available to MacroBusiness subscribers
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.
