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Australia business conditions stay strong in Nov-NAB

Published 08/12/2015, 11:30 am
© Reuters.  Australia business conditions stay strong in Nov-NAB
NAB
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SYDNEY, Dec 8 (Reuters) - Australian business conditions stayed strong for a fourth straight month in November with sales, profits and employment all in positive territory, a survey found on Tuesday.

National Australia Bank's NAB.AX monthly survey of more than 500 firms showed its index of business conditions held at +10 in November, double its long-run average.

A measure of business confidence also ticked up to +5 in November, mostly reversing October's dip to +3.

"This is basically another strong result for the NAB Survey, which in conjunction with signs of improvement in the labour market, means we can put more faith in the building non-mining sector recovery," said NAB's chief economist Alan Oster.

Sectors sensitive to record low interest rates and the low local dollar were outperforming, while mining continued to suffer from weak resource prices.

The better trend in business conditions has been one reason the Reserve Bank of Australia (RBA) skipped a chance to cut interest rates the last few months.

A separate survey of consumers from ANZ and Roy Morgan out on Tuesday also showed confidence bounced sharply last week to repair three weeks of falls. Respondents' attitudes to their finances and the economic outlook all improved in the week.

"Despite a number of downside risks, should non-mining sectors maintain their current momentum, our view is that further RBA cuts are unlikely," said Oster.

"Monetary policy is expected to remain on hold for an extended period."

The NAB survey index of business sales picked up 2 points to an historically high +18 in November, while profitability added 3 points to +13.

The index of employment eased back 2 points to +1, but remained in positive territory.

The outlook for non-mining business investment remained promising with that index at +6 and above its long run average.

Capacity utilisation eased to 80.9 percent, from 81.2 percent, largely due to a drop in the mining sector.

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