Australia's NAB business survey: Solid levels of activity in non-mining economy

Australia's Sept business confidence came at 6 vs 6 prior, while conditions stood at 8 vs 7, with NAB noting that the results suggest a multi-speed economy, but one where most key non-mining sectors are performing well in the near-term.

NAB Monthly Business Survey - September 2016

The NAB Monthly Business Survey still suggest solid levels of activity in the non-mining economy, but points to relatively patchy conditions at the industry level. The major services sectors remain the clear outperformers, while more subdued conditions in industries like retail are a disappointing result that warrants close monitoring over coming months. Nevertheless, confidence levels remain somewhat encouraging across most industries, suggesting a degree of resilience to external uncertainties.

Beyond the near-term, however, the outlook is uncertain, particularly as the impetus from resource exports and the housing construction cycle start to fade. The headwinds, and persistently low inflation, are still expected to prompt the RBA to make two more 25bo cuts to the cash rate in H2 2017, to help firm up growth and stabilise the unemployment rate. NAB’s latest Australian economic forecasts will be available on Thursday.