Business conditions and confidence ease in April: NAB
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The news: Business conditions and confidence have remained subdued in April in a sign of slowing activity in the economy, according to NAB’s monthly business survey.
The numbers: Business conditions fell 2 index points during the month to 7, to be around the long-run average. Employment declined 5 points to 2, while trading conditions fell 2 points and profitability was steady.
Business confidence was unchanged at 1 index point. Confidence deteriorated in retail, wholesale, mining, finance, and business and property. However, this was offset by improvements in recreation and personal services, construction, and manufacturing.
A NAB business confidence reading above zero reflects improving business confidence and a reading below zero shows falling confidence.
The context: All three sub-components of the business confidence index are now back around their long-run average, although confidence remained below average in April.
NAB economists noted that the decline in the employment index back to average levels is the most notable shift after a period of persistent out-performance in the labour market. They also noted moderation across both labour costs and input purchases, while retail price growth slowed to 0.9% in quarterly equivalent terms. Overall, these signs of slowing activity and easing costs support the outlook for gradual improvement in inflation.
What they said: “There was some further improvement in the pace of cost growth in April, as well as a step down in the pace of retail price growth after elevated readings in the first few months of the year,” NAB chief economist Alan Oster said.
“That is an optimistic sign for the prospects of some easing in inflation in Q2, though we will have to wait to see how this evolves over the coming months.”
The source: NAB Survey
