Two key observations from the February NAB business survey are that: conditions have stabilised at a softer level and that business confidence has fallen to its lowest reading since mid-2013, ahead of the last Federal election.
Business conditions were steady at +2, having moderated over the second half of 2014, from +9 mid-year to +3 in December. The February result is a little above the LR average for this series of 0, dating back to 1989.
The three components of business conditions were little changed in February. Trading conditions held at +5, having moderating from +9.5 in the three months to August. Profitability was steady at +2. The employment index continues to lag, albeit rebounding by 1pt to 0.
The business confidence index fell 3pts to 0, which is below the LR average for this series of +5. The mood of business was reasonably positive until around August last year, from which time it has gradually evaporated.
Westpac notes in a report on Tuesday:
In the month of February, the survey reports an improvement in construction conditions, so too for manufacturing. Of note, dwelling approvals, particularly for apartments, have hit fresh records highs in recent months.
