‘More worried’: Latest NAB survey shows growing concerns among businesses about Australia’s economy
Australian businesses are becoming more concerned about the outlook for the economy as forward-looking indicators in National Australia Bank’s fresh survey revealed a softening.
The bank’s latest quarterly business survey on Thursday revealed expected business conditions fell at both a three-month and 12-month horizon, while its forward orders index fell further into negative territory.
Capacity utilisation edged down slightly to 83.6 per cent in the second quarter, from 83.9 in the prior period, although capital expenditure plans remained broadly steady.
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By continuing you agree to our Terms and Privacy Policy.“There was further softening in the forward indicators in the business survey this quarter,” NAB chief economist Alan Oster said.
“Expectations for future business conditions have weakened, which suggests businesses are becoming more worried about the outlook for the economy even as we have so far managed to avoid a recession.”
NAB also revealed expectations for employment in the next three months fell slightly, while the 12-month expectations eased. The share of businesses reporting availability of workers as a constraint was broadly steady at 79 per cent.
The bank’s data came the same day the Australian Bureau of Statistics revealed the nation’s jobless rate lifted slightly to 4.1 per cent in June, from 4 per cent in May.
Reported cost growth remained elevated with labour costs growing at 1.2 per cent (unchanged from Q1) and purchase costs growing at 0.9 per cent (down from 1.1 per cent).
The slowdown in consumer demand also appears to be impacting businesses’ capacity to pass on costs, with price growth edging lower and pressure on margins a key issue for half of businesses.
“There appears to be ongoing improvement in materials cost growth which is very welcome, but labour cost growth is still elevated,” Mr Oster said.
“That said there has also been some gradual further easing in price growth, suggesting the slowing demand environment is putting downward pressure on firms’ ability to pass on costs to consumers.
“Pressure on margins is also now among the top issues weighing on business confidence.”
Consistent with NAB’s monthly business survey released earlier this month, the latest data revealed business conditions eased in the second quarter.
Conditions eased across the country, with large falls recorded in Tasmania and South Australia.
