Business confidence up in August but still low: NAB

The news: Trading conditions, profitability and employment improved in August, according to NAB's monthly business survey, but confidence remains low.

The numbers: Business conditions in NAB's monthly index rose by 3 points in August, led by boosts in trading conditions (+1pt to 18 index points), profitability (+2pts to 13 index points) and employment (+3pts to 13 index points). By state, conditions in Tasmania fell by 16pts, with NSW and SA also recording declines. Conditions in Queensland and Victoria lifted by 10pts and 8pts respectively.

Business confidence was up to 2pts, the highest level since the start of the year but still historically low. Confidence was also mixed across industries with mining recording a 35pt fall. In trend terms, confidence was weakest in retail (-14pts) and remained negative in mining and finance, business & property.

The context: NAB chief economist Alan Oster said the survey indicated a continuing run of resilience through the middle of the year despite broader slowing in the economy. Leading indicators also offered glimpses of light with forward orders up 1pt to 0 index points in August. Forward orders were still negative in trend terms due to a sluggish retail sector.