Australia: Business confidence continues to rise in January
The business confidence index produced by the National Australia Bank (NAB) climbed to 12 points in January, the highest reading since April 2017, from December’s revised 10 points (previously reported: +11 points). The series sat above its long-run average and the neutral 0-point threshold, indicating that Australian businesses were largely optimistic regarding economic conditions in the coming months. It should be noted, however, that the survey was conducted before the recent turbulence in global financial markets.
According to the NAB, January’s uptick was driven by a more positive outlook in the mining, construction and finance sectors, while sentiment in the wholesale and retail sectors dipped slightly from the previous month. All sectors remained firmly in positive territory, with the mining and construction sectors the most upbeat. Confidence in the construction industry has strengthened markedly in recent months, despite a softening in the Sydney housing market, on the back of a solid non-residential sector and resilient residential construction activities.
Meanwhile, forward orders, which tend to accurately reflect domestic non-mining activity, moderated slightly this month but still sat above their long-run average. In addition, capacity utilization increased further to 82.7% in January, a positive sign for investment and employment activity this year.