Australian business conditions and confidence falls in March

Australian business conditions dropped in the month of March, reversing the strength recorded in the earlier two months. Conditions fell to 14.1 in the month from February’s 20. But this leaves conditions still elevated, well above the five-year average of 6.8 and around levels seen in the months of November and December.

Meanwhile, business confidence also dropped to 7.4 in March from 9.1, and is now just above the long run average and the lowest reading since August 2017. It is not a surprise that sentiment has fallen given the escalation of trade tensions and associated financial market volatility, stated ANZ in a research bank.

Conditions dropped throughout most measures. Employment conditions reversed nearly all of the rise in February, while capacity utilization dropped slightly to 82.4 from 82.5. Profitability conditions dropped to 14, from 17.7, which is the lowest reading since November 2016.

Conditions came in mixed throughout industries, strengthening in manufacturing and personal & recreation service, and falling sharply in the retail sector. In all, though, conditions on a trend basis are now above long run averages throughout all industries.

Conditions dropped sharply in New South Wales but continued to be very solid in Victoria. Conditions softened in all other states except Tasmania, where conditions continued a very volatile run, stated ANZ.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was neutral at -6.11068, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -46.6465. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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