Glenns Stevens entreaty for Australian business to let loose some animal spirits is falling on deaf ears at the top end of town.
That’s the message in the NAB’s quarterly ASX 300 business survey. The survey showed business confidence for the ASX300 fell 13 points to -3 in Q4 2014. That’s the weakest confidence since December 2012. Conditions weren’t so weak, falling only 3 points to to +8.
Also reflecting this today is the collapse in the capital expenditure plans released by the ABS. Data for Q4 2014 shows a fall in Capex of 2.2% against expectations of a fall of 1.9%.
The key to the future is the confidence number and the NAB summarised its survey in a particularly negative light.
Big business in Australia is losing confidence, affecting medium-term growth and capital expenditure plans. Overall confidence among larger firms has now fallen below its long-term average and is weaker than for smaller companies and the broader economy.
NAB Chief Economist Alan Oster highlighted the enduring patchwork nature of the economy noting, “large falls in the mining and transport sectors offset solid gains in recreation and retail, while big construction firms continued to report the weakest conditions overall, possibly reflecting the pullback in mining-related construction.”
There could be a silver lining in there. The fact that recreation and retail are improving could be a sign that a lower dollar and lower interest rates will see the consumption side of the economy improve through 2015.
But for the moment Australia’s big businesses are hunkered down and not spending.