The NAB business confidence index in Australia fell to 2 in June 2019 from 7 in the previous month and matching market expectations. The latest figure was below its long-run average of 6, with wholesale and transport & utilities showing the weakest levels of confidence. However, business conditions strengthened (up 2 points to 3), due to a lift in employment (up 3 points to 5) and sales (up 3 points to 6), while profitability was unchanged (at -2). Meanwhile, leading indicators were mixed. Forward orders were unchanged and remained weak (at -4) with evidence of weakness across most industries. Capacity utilization rose (82.1% vs 80.9% in May), but after easing in early 2019, remaining below levels seen in late 2018. “For now, labor market developments appear to be the key driver of monetary policy, with weak wage growth seeing both slower household income growth and weak inflationary pressure," said Alan Oster, NAB economist. Business Confidence in Australia averaged 5.91 Index Points from 1997 until 2019, reaching an all time high of 21 Index Points in April of 2002 and a record low of -30 Index Points in October of 2008.
Business Confidence in Australia is expected to be 6.00 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Business Confidence in Australia to stand at 6.00 in 12 months time. In the long-term, the Australia Business Confidence is projected to trend around 7.00 Index Points in 2020, according to our econometric models.