The NAB has released its quarterly ASX 300 Business survey this morning and like the rest of the economy larger firms are suffering under relatively weak business conditions but are hopeful that the future is going to be brighter which has seen confidence rebound.
This is a continuation of a worrisome dynamic in the Australian business community where there is a gulf between what is being experienced and what is expected in the future. Indeed the NAB reported that for theses large firms they surveyed that conditions tanked from +2 in the June quarter to -7 in September.
The big drivers of the fall are employment and trading conditions which seems to speak of an underlying weak domestic economy. Interestingly and suggesting that the NAB’s forecast of a rising unemployment outlook in the year ahead is spot on the money is that the larger firms have been able to rein in costs and control cost pressures more effectively via managing their labour needs.
Overall it’s not great news for the economy and might help explain why Glenn Stevens was so aggressively talking down the Aussie dollar this morning – the economy needs it.