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Business conditions rise, experts hope for stabilising economy

Business conditions recovered slightly last month, according to the NAB’s monthly business survey, as many organisations begin to benefit from rising sales, the lower dollar and potential interest rate cuts.

After edging down over the previous two months, conditions recovered by a solid five points in September, lifting out of negative territory to +2 index points.

Conditions improved in all industries other than personal & recreational services – which was unchanged at strong levels. There were large gains in manufacturing and mining conditions.

Despite this, conditions remain at depressed levels in manufacturing, construction, retail and wholesale.

This overall rise in conditions has led experts to suggest the local economy may be stabilising, though they’ve warned weakness in forward orders and contracting stocks mean its unlikely any recovery will be swift.

Business confidence also rose in September, up 7 points to -2 index points, although the outcome still implies negative confidence readings in both seasonally adjusted and trend terms. According to NAB, the sharp depreciation of the AUD, as well as speculation about interest rate cuts drove the confidence rise.

Confidence rose across a majority of industries in the month, with a particularly strong rise in manufacturing suggesting the lower AUD provided some relief. The largest pick up in confidence was in manufacturing, followed by finance/ property/ business, transport & utilities and retail.

Confidence was neutral in recreation & personal services and was weakest in wholesale (-13) and construction (-9).

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Lorna Brett

Lorna Brett

Lorna was Dynamic Business’ Social Web Editor in 2011/12. She’s a social media obsessed journalist, who has a passion for small business. Outside the 9 to 5, you’re likely to find her trawling the web for online bargains, perfecting her amateur photography skills or enjoying one too many cappucinos. You can follow her on <a href="https://twitter.com/#!/dynamicbusiness">Twitter @DynamicBusiness</a>

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