Australian business conditions rise slightly in June

Australian business conditions rose slightly in June. It rose to 15 in June from May’s 14, which is slightly disappointing given the strength reported in other business surveys in the month. Conditions have eased from the bumper results reported in the six months to April, but continue to be well above the long term average.

Significantly, the details are more encouraging. Both profitability and capacity utilization recovered, with the latter staying around the highest levels since the GFC. These indicators are also much higher than the long term average, and imply that strong employment growth is likely to continue and the jobless rate is expected to see ongoing reductions, stated ANZ in a research report.

There are considerable differences in business conditions throughout the states. New South Wales’ trend decline continued in June, while conditions are now at the lowest level since January 2016. Again, conditions are still strong compared to historical levels; however, the recent deceleration shows that New South Wales’ previous outperformance might be sustained indefinitely. Meanwhile, conditions in Queensland recorded a solid rise in June, and are now trending around elevated levels. The end of the downturn in mining investment and an acceleration in population growth is underpinning some rebound in economic activity, stated ANZ.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was highly bullish at 156.189, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -39.023. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex