Australia: Business conditions strong and businesses have their say on tax - NAB

The Australian business conditions index in 2018 Q1 increased by 2pts to +17, its highest level since 2007 while the Business confidence index was unchanged at +7 index points a little above its historical average, notes the research team at NAB.

Key Quotes

“According to Alan Oster, NAB Group Chief Economist “Business conditions reached a new post-GFC high in this Quarter’s survey and while the monthly survey indicates conditions eased late in the quarter, the bottom line is that they remain strong reflecting robust trading conditions, profitability and employment growth.”

“Moreover, the strength in business conditions is broad based across industries, with conditions positive and also at, or above, their long-run average in all industries.” said Mr Oster.

 “While retail continues to lag other sectors, retailers were surprisingly optimistic about the number stores over the next couple of years, with more expecting an increase than a fall. The Survey also further confirms that the future of retail is online – no one is planning to cut back their budget in developing this area of their business.” Mr Oster said.

Mr Oster indicated that “One concern coming out of the survey is the decline in confidence in a couple of sectors – finance and particularly property. While business conditions in the property sector are still decent, the cooling in housing markets and price growth being experienced appears to be weighing on sentiment.”