The NAB Business Survey this month has been the one really bright spot on an economic RBA calender that otherwise speaks of weakness or at least a worrying outlook for the Australian domestic economy at the moment.
But while it’s easy to dismiss the huge jump in business conditions in the NAB survey as an aberration, data this morning from Dun & Bradstreet suggest that business conditions may indeed be looking healthier than many imagine.
The average time taken for Australian businesses to pay their invoices has fallen to the lowest level since the third quarter of 2007, in signs that operating conditions have strengthened this year and the business sector’s cash position is improving.
According to Dun & Bradstreet’s Trade Payments Analysis, businesses settled their accounts in an average of 51.7 days during Q3 2014, with the proportion of invoices paid within standard terms (1–30 days) lifting to 54 per cent.
Gareth Jones, CEO of Dun & Bradstreet Australia and New Zealand, said that the faster payment reflected “the steady improvement in invoice payment times since the global financial crisis is reflective of a gradual recuperation in the business sector”.
He also highlighted that the trend for faster payments “is helping move money into the hands of business owners earlier and, in turn, helps them cover their expenses, pay their suppliers, invest in the growth of their business and more broadly, circulate more money in the economy”.
It’s a good economic news story in an otherwise disappointing month of data and perhaps reflects the steps, however slow, that business is taking toward reawakening its “animal spirits” RBA governor Glenn Stevens so desires.