The NAB business confidence index in Australia rose to 4 in July 2019 from 2 in June, beating market expectations of 3. The lift was broad-based across industries after a sharp fall in June and a period of volatility around the Federal Election. However, the bounce may have been short lived, as sentiment remained below average levels. Meanwhile, business conditions weakened, driven by a decline in the employment sub-index (down 5 points to 0). Trading conditions also edged lower, while reported profitability increased slightly in the month. Forward-looking indicators remain weak. Forward orders edged higher in the month but remained negative and well below average while capacity utilisation unwound its sharp spike last month and is now again just below average. "It appears that both the cut to interest rates and boost to tax rebates is yet to feed into the business sector and that the weakness in Q2 has persisted into Q3", said NAB group chief economist Alan Oster. Business Confidence in Australia averaged 5.91 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 6.00 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 6.00 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.