Australia NAB business condition dropped -6 pts to 15 in My. Business confidence dropped -5 pts to 6. Both reversed the improves from March to April.

Alan Oster, chief economist at the NAB.

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“Despite the easing in the business conditions index, conditions remain robust in the business sector. Conditions remain well above average across most states and industries.”

“Confidence is highest in trend terms in Tasmania and Western Australia.” “Queensland and South Australia are slightly above the National average while New South Wales and Victoria continue to lag the other states at below average levels.”

“Both business conditions and leading indicators continue to suggest a pick-up in economic growth and that, over time, jobs growth should see the unemployment rate fall towards 5%,”

“The outlook for the labour market and evidence of a pick-up in wage growth remain key for monetary policy. Evidence of a genuine pick-up in wages growth and a flow-through to inflation more broadly will provide a launch pad for the RBA to begin lifting rates from current record lows.”

“We don’t expect this to occur until May 2019, as while the survey continues to point to a growing economy, strength in employment and a decline in the unemployment rate, these factors are yet to materialise in a significant pick-up in wages,”

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