Over the last few months, the adjectives used by NAB economists to describe business conditions have strengthened from “solid” to “elevated” and then last month to “record high”. According to NAB’s latest monthly business survey of 400 firms conducted in the last week of April, its Business Conditions Index jumped from a revised reading of 15 to 21.
Typically, NAB’s confidence index leads the conditions index by approximately one month, although in recent months the two surveys have diverged and the condition index has led the confidence index higher in trend terms since late 2014. The latest figures have not changed this situation. The confidence index moved up from a revised reading of 8 in March to 10 in April, a figure which is above the long term average reading of 6 but not by particularly abnormal amount.