Daily Commentary BY THE CURVE TEAM –

Business Confidence Remains Weak

11th of December, 2019

Survey data out yesterday has concerning implications for the outlook, as business conditions and confidence remain weak.

The monthly NAB business survey out yesterday showed business conditions for November remained weak. Whilst not showing any significant deterioration on the October results, businesses are yet to see any major improvement in terms of conditions or confidence.

Looking closely at the survey, confidence gave up the 2pt gain in October, returning back to zero in the latest release. Conditions overall were steady at 4pt but the component results somewhat mixed. Trading conditions gave up 1pt but remained strong at 6. Profitability was up 3pts and employment steady at 4pts. Forward orders had the biggest decline in November, falling 5pts to -2.

Focus today will shift to the consumer confidence number released mid morning. After last weeks GDP showing softness in the consumer parts of the economy, it will give insight into what consumers are thinking in the run up to Christmas. Should sentiment remain below 100, it may pose problems for small and large retails hoping for a pick up in spending over the festive season.

Offshore, news suggests that the next wave of tariffs by the US on Chinese goods will be delayed into next year. Although this is considered the most likely outcome, hard evidence for it is thin. Additionally, with less than 48 hours until ballots open in the UK, final polls continue to point to a win by Boris Johnson. However, the margin of victory appears to be decreasing.

Matthew Dunshea

Client Relationship Manager