Australia NAB business conditions dropped -2pts to 14 in July. Business confidence rose 1pt to 7.
Alan Oster, NAB Group Chief Economist noted in the release that the business conditions index “has now fallen considerably since April”. But business conditions remain “above average”, suggesting “favourable conditions have continued to persist through the middle of 2018”. The weakness in profitability and trading conditions was partially offset by improvement in employment.
Overall, the survey results were broadly in line with NAB’s outlook. Business sector looks “relatively healthy”. Growth in employment will reduce spare capacity gradually. And that should bring in a “rise in wage and a more general lift in inflation”. However, trends in forward indicators will be watched, which may be signaling slowdown.
