Australian business conditions have been more than just solid in the first half of 2018, having hit a record high in April. The latest readings have done nothing to alter this picture.
According to NAB’s latest monthly business survey of 400 firms conducted in the last week of June, its Business Conditions Index steadied after a large fall in May. After revisions, the index crept up from 14 at the end of May to 15 in June. NAB chief economist Alan Oster said, “While forward looking indicators have weakened a little, they still point to favourable business conditions for the rest of 2018.”
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 confidence index slipped from a revised reading of 7 in May to 6 in June, which is roughly the same as the long term average reading.
