The NAB business confidence index in Australia fell to 0 in September 2019 from 1 in August and below its long run average of 6. Meantime, business conditions advanced 1 point to 2, still below average for the 6th straight month, as trading (+1 point to 4), profitability (+1 points to -2), and employment (+1 points to 3) increased. Forward looking indicators were mixed and capacity utilisation declined, but remained above average. Across sectors, sentiment dropped in all industries except retail and construction which rose and recreation & personal services, which was flat. “We continue to watch the business sector closely – the housing downturn and the weakness in the retail sector are likely to continue to play out further, adding to private sector weakness in the economy. Rate cuts will help but will lag and with a weak consumer and higher global uncertainty, we are unlikely to see a material improvement in the short-term”, NAB chief economist Oster said. Business Confidence in Australia averaged 5.87 Index Points from 1997 until 2019, reaching an all time high of 21 Index Points in April of 2002 and a record low of -30 Index Points in October of 2008.
Business Confidence in Australia is expected to be 5.00 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Business Confidence in Australia to stand at 5.00 in 12 months time. In the long-term, the Australia Business Confidence is projected to trend around 7.00 Index Points in 2020, according to our econometric models.