NAB business survey spears into the earth

Via NAB:

The survey continues to show widespread impacts of lockdowns. Both conditions and confidence deteriorated sharply in the month, with the latter now back in negative territory. Unsurprisingly, due to its size and the severity of the lockdown in the state, NSW drove much of the result this month. Both confidence and conditions fell sharply following a full month of lockdown in the state. That said, conditions fell in all mainland states, with SA in particular also seeing a very large fall. Conditions softened in all industries, with the exception of mining – where it remains elevated. The forward-looking indicators also softened and, with forward orders now back in negative territory and capacity utilisation now back around average, suggest little improvement in conditions in the near term. Overall, the survey shows that the strength in the business sector seen in early-to-mid 2021 has faded on the back of fresh disruptions in the economy but it has not yet deteriorated to the lows seen in early 2020. With the survey showing a very strong momentum in the leadup to the recent lockdowns, the hope is that once restrictions are eased, the economy will rebound relatively quickly, consistent with the experience through the pandemic to date, and resume a strong growth trajectory – and a return to strong capex and employment plans.

If anything, that’s worse than I expected. All components are getting mauled:

Including forward-looking and forget about inflation:

With Sydney locking down until summer, we are looking at a full bore double-dip recession over two quarters.

Like it or not, the RBA is going to have to print. Full report.