Australia: Business conditions at an historic high in April - Westpac

Andrew Hanlan, Research Analyst at Westpac, notes that in April, ahead of the Federal Budget, Australian business conditions are at an historic high and business confidence is at well above average levels, the NAB business survey reports.

Key Quotes

“The business conditions index printed at +21 in April, up 6pts on last month, to be at the equal highest level since the monthly survey began in March 1997 (and equalling the highest level since 1994 in the quarterly survey).”

“Looking through the month to month volatility, business conditions trended higher through 2017 and have remained at high levels in 2018. The index averaged +10 in 2016, lifted to +13 over 2017 H1 and has averaged +18 from October 2017.”

“This is consistent with the strengthening of domestic demand over this period, although overstating the pace of demand growth.”

“Business confidence rose by 2pts to +10, a well above average level, albeit trailing the strength in conditions.”

“As with conditions, business confidence has improved over the last couple of years, lifting from +5.5 in 2016, to +9 over 2017 H1, to +10 since last October. This mirrors the lift in confidence globally, as world growth accelerated to the strongest pace since 2011.”