Business conditions deteriorated sharply in late 2018, NAB survey finds

Australian business conditions experienced their steepest monthly fall since the global financial crisis in December, according to National Australia Bank’s (NAB) latest monthly survey.

NAB’s measure of conditions plunged by 82%, going from +13 in November to +2 in December, while business confidence remained flat at +3 — well below its long-term average of +6.

The declining business conditions were ‘broad-based’ and felt across every state and industry, said NAB’s chief economist Alan Oster.

“Retail is weakest, and continues to be the only industry to record negative conditions in trend terms, suggesting an ongoing deterioration in activity in the sector.”

The mining industry provided a rare bright spot in the report, recording the strongest business conditions at +22 in trend terms.

“Confidence (in trend terms) remains highest in mining, though this has eased in recent months,” Oster said. “The remaining industries are currently at or below average, with confidence now lowest in finance, business and property services.

“Overall, these measures suggest that inflationary pressure remains weak, with final product prices and input prices, such as purchase costs and labour costs, continuing to track at relatively low levels.”