Business conditions ease back

Australian business conditions have pulled back from their record highs. 

The National Australia Bank index of business conditions fell 6 points to +14 in March.

Although that was still well above the long-run average of +5.5, it reversed gains in the previous two months.

The employment index eased back to +9 in March, down from an all-time high of +16 the month before.

Still, that index is at an historical high.

Profitability slipped 4 points to +14 in March, and the sales index eased 4 points to +20.

Business confidence fell 2 points to +7.

Significantly, the survey was conducted after US President Donald Trump escalated trade tensions by announcing tariffs on at least $50 billion of imports from China, Australia’s largest single export market, which responded aggressively.

The fall in business confidence also coincides with the ongoing market volatility.

The survey results would be closely noted by the Reserve Bank of Australia which keeps talking about its optimism about the business outlook.

NAB chief economist Alan Oster said the figures were still positive, despite the fall.

“The strength in business conditions and leading indicators are consistent with stronger economic growth in coming quarters and the employment index is pointing to strong jobs growth which should reduce unemployment,” Mr Oster said.

An award winning author and journalist, commentator, lecturer, and speaker, Leon is a freelance business journalist who covers a range of areas including politics, strategy, globalization, leadership and all the big trends ahead. His main skill is summing up all the news that’s around. For the last 30 years, his main focus has been on management issues. He also produces two podcasts for RMIT University, Talking Business and Talking Technology. Leon has worked for Fairfax, News Limited, AAP and the Herald and Weekly Times.

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