Australia NAB Business Confidence index hits 5-month high

The National Australia Bank (NAB) business confidence index rose 4 points to +11 index points in December; the highest level since July 2017, missing the estimate of +12 index points by a narrow margin.

Meanwhile, the business conditions index ticked higher to  +13 index points but printed well below the estimate of +15 index points. Still, the actual figure is well above the long-run average of +5 index points.

Key quotes from NAB Group Chief Economist Alan Oster

The NAB Business Survey employment index tends to suggest the official figures may be currently ‘overstating’ the degree of job creation.

The employment index implies employment growth of a little less than 300K at present, and a slowdown to around 240K per annum over the next 6 months, or a monthly pace of around 20K per month.

Hopeful that Australia will see temporarily above-trend economic growth in coming quarters, thanks to support from improving business investment and elevated levels of infrastructure construction.

We maintain our expectation for the first RBA hike to come in the second half of this year, but only if the labor market and wages improve further and the property market holds steady.