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Australia’s Business Conditions are Strong, but Confidence Weakens – NAB


The business environment in Australia remained positive for the last quarter of 2022. However, sentiment declined significantly due to concerns about global and domestic economic growth.

NAB’s business condition index decreased five points to 18, from 23 in its third quarter, to 18 in the fourth.

Business conditions remained robust despite this. The components of trading conditions, profitability, employment, and employment all fell, but they remained high.

The December quarter saw a significant drop in business confidence, from +9 in September quarter to -1. Confidence turned negative in most industries, though it showed some positive momentum in transport & utilities, and recreation & personal services.

NAB Survey revealed that supply-side restrictions remain tight. Nearly 90 percent of firms reported labor availability as a constraint to output. About half reported difficulties with materials availability.

In the fourth quarter, leading indicators remained strong. Despite the improvement in expectations, business conditions were still strong at +18 index points for the 3-month and 12-month time horizons.


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