The NAB Business survey for January is out and once again both business conditions and confidence paint a story of an economy stuck in the slow lane.
NAB Chief Economist Alan Oster didn’t gild the lily when he said “The fundamental story painted by the January Business Survey is still one of a soft economy, with little momentum, weak-ish confidence and considerable difference across sectors.”
Confidence was up mildly to +3 from +2 and conditions printed +2 for the second month in a row – down from Novembers +6 read.
Alan Oster said that:
The trend in business conditions has lost momentum. Conditions have fallen for three consecutive months, with the index dropping another half a point in January (unchanged when rounded) to +2 index points – below the long run Monthly Survey average (+4).
Business confidence edged up in the month despite very few signs of improvement in many segments of the economy. Nevertheless, the trend in confidence is clearly down and sits at relatively soft levels.
That’s not good news for the economy.
Neither is the break up of the results for the sub-indices which show the headwinds facing the economy, and the deterioration since the RBA Board meeting in December is clear. So we can guess what the RBA’s liaison was telling them, which helps explain why they moved rates.
Trading dipped to 5 from 9 in December and 11 in November. Profitability has fallen to 1 against November’s 6 and December’s 2, while employment has remained in negative territory at -1. Forward orders were a relative bright spot increasing from -1 in December to 1 in January. But once again that’s a long way from the 6 print of the November survey.