Daily Commentary BY THE CURVE TEAM –

Pre-Covid Surge Business Survey Bounce

15th of July, 2020

Data released yesterday on business confidence and conditions for June appears to be outdated as lockdown measures harden and Covid-19 case numbers rise.

After falling to a record low of -65 in March, the business confidence index continued its improvement by recovering to +1 in June. Business conditions also rose but remain low at -7. The improvements bring business confidence back to pre-covid levels but business conditions are still lagging.

The update would be encouraging, if not for the reversal in Covid-19 case numbers. Victoria’s latest count for daily cases is at 270, which was a jump on previous days and thwarted hopes that the second wave has peaked after case numbers appeared to be plateauing.

As lockdowns are reimposed to contain the spread of the virus, business conditions will sour and confidence will be hit. Already consumer confidence has been hit, with the ANZ weekly update showing a fall of 0.5% for the third week in a row.

The weekly ANZ data suggests there is downside risk to today’s monthly Westpac consumer confidence survey.

Josh Stewart

Client Relationship Manager