AUS
NZ
UK
CA
USA
IND
.jpg)
Summary
- Economic activities are improving as states are easing restrictions and borders are re-opening.
- Festive season and rising expectations from the economy are propelling consumer confidence to higher level.
NAB Australian Economics has released the November business survey, suggesting ‘rapid rebound in the economy’ as states are easing restrictions and borders are re-opening.
Business confidence and conditions are now above average. Moreover, they are stronger than the pre-pandemic level.
Its business confidence indicator rose for the fourth consecutive month, increasing 9 points in November to 12 points. Conditions rose 7 points to 9 index points, which is above average.
Source: NAB Business Survey November 2020, 8 December 2020
Capacity utilisation improved with a large gain. It rose 1.4 ppt but remained below the long-run average. Forward orders turned positive.
Although the employment index moved higher, it remains in the negative territory. Trading and profitability posted large gains during the month and are well above averages.
NAB expects hiring to lag other components. Employment index suggested job losses as more firms reported lower employment compared to the previous month.
Source: NAB Business Survey November 2020, 8 December 2020
Excluding wholesale, business conditions improved in all industries with the largest gains in mining, construction and retail. Only construction and recreation & personal services remain in negative territory.
The largest gain in confidence was recorded in retail and wholesale. Except construction and mining, confidence inched up in all industries.
Only Victoria has a negative reading on the conditions index. Business conditions in Victoria were down 2 pts, and Tasmania was down 8 pts.
Except for Tasmania, business confidence improved in all states with large gains in Victoria and New South Wales.
Growth in input price continues to be ahead of growth in final products’ prices. Retail inflation moved upwards but remains soft.
NAB has highlighted that the survey suggests the economy is bouncing back, which is favourable after a significant improvement in GDP in the September quarter.
They are expecting solid growth in Q4, and economic activity would remain below the pre-COVID levels for some time. The economy is anticipated to reach the pre-COVID level of GDP by the end of 2021, and the labour market could recover sometime after the economy attains the pre-COVID level of GDP.
ANZ-Roy Morgan Consumer Confidence
ANZ-Roy Morgan Consumer Confidence has reached the highest level for 2020. It improved for the second consecutive week.
For the week, the index improved 1.8 pts to 109.3, which is 13.8 pts above the 2020 weekly average of 95.5 pts.
Image Source: © Kalkine Group Image
This is driven by increasing confidence for the long term prospects of the economy and respondents saying now is a ‘good time to buy major household items’.
Over the next 12 months, respondents constituting for 17% expect good times in the Australian economy. However, 21% are calling for bad times that is down 2 ppts.
The festive season is driving the confidence to buy major household items. 25% say now is a bad time to buy a major household item, while 43% say now is a good time to buy a major household item.
