The NAB survey for July, which was taken prior to the introduction of stage 4 restrictions in Victoria, saw a marked divergence between improving business conditions but weaker business confidence:
Business conditions rose 8pts in July to 0 index points, continuing the recovery since reaching a trough in April. The improvement was evident across each of the three sub-components, with trading and profitability now back in positive territory and the employment index continuing to improve. The improvement in conditions was broadbased across states but the monthly outcome was mixed across industries.
According to Alan Oster, NAB Group Chief Economist “business conditions have continued to recover almost as quickly as they deteriorated. Conditions have now recovered to be broadly around their pre-COVID level with improvements across the country. In the month, the outcomes across industries were a little more varied – possibly reflecting that there will be ongoing fallout for some sectors”.
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Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
