The economic data at the moment in Australia is neither too hot, or not too cold, which means it is easy to interpret each release which ever way the commentators see the economy heading in the months ahead.
The antidote to this is the NAB Business Survey which gives a full picture of the backdrop against which business is operating at the moment, and in which Australians are employed.
This month’s NAB survey, released this morning, shows:
Business conditions lifted slightly in March, but remained at relatively subdued levels, weighing on business optimism. Confidence still positive but softened to its lowest post-election level to be below long-run trend. Sales fell slightly in March and employment, though better, still points to soft labour market conditions.
The good news, as the ANZ Job Ads series yesterday suggested, is that employment is picking up — rising from -7 to -1. While still negative, this is much better than it has been. But the NAB says it’s consistent with unemployment rising to 6.5% this year.
The overall break up of data is the key to getting the most out of this survey, and what it shows clearly is a realistic picture of the Australian economy at present.
That is: the economy is in transition, and this data tells a story that is neither good nor bad, but simply that the the gap between conditions and confidence is converging toward the zero line.
(The NAB survey confirms the RBA’s period of stability in interest rates will last some time.)