Australian business conditions were robust in the first half of 2018, especially so in April when one index registered an all-time high. Readings then slipped back over the next couple of months but they have still remained at above-average levels to date.
According to NAB’s latest monthly business survey of 400 firms conducted in the last week of October, business conditions have remained at a healthy level despite being lower than in September. After revisions, the index fell from a revised value of 14 in September to 12 at the end of October. NAB chief economist Alan Oster said, “Business conditions have eased back from the high levels seen earlier in the year but remain well above average.”
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. After revisions, the confidence index fell by 2 points to register 4 on the index in October. A reading at this level suggests business confidence is a touch on the low side but still not far from the long-term average value of 6.