The NAB business confidence index in Australia declined unexpectedly to 0 in March 2019 from 2 in February, missing market consensus of 4 and staying below its average of 6 for the sixth straight month. It was the lowest reading since July 2013, amid uncertainties around the outlook for household spending and the effect of falling housing prices in some cities. Sentiment deteriorated in all industries except manufacturing which was flat, and mining which increased in the month. Still, business conditions rose 3 points to 7, above its long-run average of 6, driven by sales (up 4 points to 12), profitability (up 4 points to 5) and employment (up 2 points to 7). Meantime, both forward orders (-1 vs -2 in February) and exports (0 vs -1) improved. "With activity having already slowed, it is important to assess whether this is temporary or has persisted into 2019 – the survey suggests this may be the case at least for Q1," NAB Group Chief Economist Alan Oster said. Business Confidence in Australia averaged 5.95 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 2.00 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 7.00 in 12 months time. In the long-term, the Australia Business Confidence is projected to trend around 6.00 Index Points in 2020, according to our econometric models.