Business confidence holds up even as conditions worsen

Tuesday, 13 Dec 2016 08:30:11 | Michael Janda

Business conditions, trading and profitability all eased in November. (AAP: Patrick Hamilton)

Business confidence has held up, even as conditions worsened to their worst level in a year-and-a-half.

NAB's widely watched monthly business survey showed a decline in conditions from +7 to +5 last month, which is around average levels but still the worst reading since April 2015.

The decline in conditions was typified by a easing in trading from +11 to +10 and a decline in profitability from +7 to +5.

However, sentiment amongst business leaders remained positive, rising from +4 to +5.

NAB's chief economist Alan Oster has warned that business leaders may have little basis for such optimism, though.

"We are becoming increasingly concerned about the underlying momentum in the economy as evidence mounts that the non-mining economy is losing steam," he noted in the report.

"The downward trend in business conditions and signs of weakness in the third quarter National Accounts, beyond one-off influences such as poor weather, lend further support to this view.

"For now though, we expect to see a fair degree of 'bounce-back' next quarter, before the economy resumes its relatively subdued growth track, characterised by muted domestic demand."

More to come.

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Business confidence holds up even as conditions worsen

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