More encouraging news for the economy from the monthly survey of business conditions and confidence by the National Australia Bank.
It comes a day after the monthly ANZ job ads series showed a solid rise in new job ads in November – up 0.3% from October and 1.3% from November 2014, to be 12.3% higher.
Most of those gains came on the primary form of job advertising – websites, and not the still fading newspaper sector.
Yesterday, the NAB said that its latest Business Survey suggests “the apparent recovery in the non-mining economy has remained on track, with business conditions holding up at above average levels for the past nine months”.
The NAB said the Business Conditions Index in the survey was steady at +10 points in November – the fourth consecutive month of conditions at this level – which is well above its long-term average of +5 points.
NAB Group Chief Economist Alan Oster said in a statement, “This is basically another strong result for the NAB Survey, which in conjunction with signs of improvement in the labour market, means we can put more faith in the building non-mining sector recovery”.
The survey showed once again it was industries sensitive to the impact of record low interest rates and the sharp slide in the value of the Aussie dollar which “outperformed”.
The NAB said as well, “improvements in areas such as retail in November are an encouraging sign that the recovery is becoming more entrenched”.
"In contrast, mining continues to weaken. This is also reflected in variations across states.
“In fact, the survey is showing a widening gap between deteriorating mining/mining services (-21) and the rest of the economy,” according to Mr Oster.
But while conditions continued to run at firm levels, business confidence is still lagging.
The NAB said "business confidence has been disappointingly muted, despite recouping some of the losses from last month. The confidence index rose from +3 to +5, which is still marginally below its long-run average.”
"Given improved prospects for the domestic economy outside of mining, relatively subdued confidence is most likely a reflection of the uncertain global economic environment. In any case, it was good to see a broad-based increase in confidence across industries,” Mr Oster said in yesterday’s release..
NAB’s measure of capacity utilisation eased back in November (to 80.9% from 81.2%), despite better trading conditions. The decline in capacity utilisation was particularly heavy in the mining industry, but mixed elsewhere.
“Capacity utilisation is a useful measure of the underlying health of the economy. It eased a little this month, but the trend remains distinctly positive, which bodes well for business investment and the labour market,” said Mr Oster.
As a result of the survey and last week’s third quarter GDP figures, the NAB said it sees “no change to the RBA cash rate in coming months”.
"The RBA’s recent policy statement continues to reference a “gradual improvement in conditions in non-mining sectors” and further easing would require a significant deterioration in the economic outlook or a reassessment of growth in the non-mining economy. Today’s survey suggests maintaining the status quo,” the NAB said.
