Australian businesses faced a stark dichotomy between hope and reality in the three months to December with confidence reaching a 2.5-year high, while conditions trailed.
NAB’s quarterly business survey for Q4 2013 put business conditions at a 12-month high of -3 points, remaining below trend and behind business confidence at 8 points. From the report:
“The post-election ‘honeymoon’ continued well into the December quarter, helping to prop up confidence, although a better housing sector (predominately driven by investors), higher asset prices and a lower AUD and interest rates are all contributing.”
Looking at business conditions, NAB found improvements in the key sub-indices of profitability, employment and forward orders, although they remained in the contraction zone, printing -3, -6 and -2 respectively.
Trading conditions were soft for much of the quarter but picked up in December for a +1 print, from -5 the previous quarter.
The economy and business needs this gap between the hope of confidence and the reality of conditions to close. Clearly Australian business still thinks it will.
Business Insider Emails & Alerts
Site highlights each day to your inbox.