The NAB business confidence index in Australia fell to 3 in November 2018 from an upwardly revised figure of 5 in the previous month. It was the weakest reading since January 2016 and the second straight month that the index is below its long run-average of 6, as business conditions slipped 2 points to 11. By component, both profitability (down by 5 points to 8) and sales (down by 2 points to 15) declined, while the employment index picked up (up 2 points to 9). At the same time, forward orders decreased 3 points to 0, pointing below its long-term average for the first time since late 2016. By sector, conditions dropped sharply in construction, and fell in transport, manufacturing and mining. Meantime, retail and finance, business & property services saw a small improvement. In trend terms, the pattern of strength in mining and weakness in retail continued in November. Business Confidence in Australia averaged 5.98 Index Points from 1997 until 2018, 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 10.00 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 5.73 in 12 months time. In the long-term, the Australia Business Confidence is projected to trend around 6.00 Index Points in 2020, according to our econometric models.