The NAB has just released the quarterly version of its business survey which takes in a bigger sample size than the monthly one. For this reason it is the one that we pay a little more attention to although whether monthly or quarterly the NAB Business survey is the only piece of economic data you really need to understand what is going on in the Australian economy.
This latest release covering the March quarter shows that business confidence in Q1 eased back from recent highs to +6 and the NAB says the monthly survey shows a “steady deterioration over the quarter.”
But as a long term user of this survey, the thing that jumps out for me is conditions – which is simply the economy in which businesses actually find themselves, rather than confidence, which is the economy they think they will find themselves in.
The good news here is that conditions in March were at 0 from -2 in Q4 2013 and -7 in Q3 2013. That’s the highest level in 18 months, according to the NAB.
This is also reflected in the improvements in trading, forward orders and profitability. While employment is still negative it has improved to -5 from -9 two quarters ago.
The NAB says it all suggests “six-month annualised GDP growth in the March quarter of around 3%”. While still below trend, this is more healthy than what had been expected a few months back.
Monetary policy is working, the economy is healing.