The numbers — BCI
Actual: 47 pts (Q3:12)
Consensus: n/a (Q3:12)
Previous: 41 pts (Q2:12)
It is not surprising that businesses still have a negative outlook regarding the future of the economy for the next twelve months. The Bureau for Economic Research’s business confidence index increased by 6 pts in Q3:12 to 47 pts from 41 pts in Q2:12, but the negative sentiment is still evident. Business confidence pessimism has been constant for sometime. Prior to the recession, the business confidence index was sitting at a lofty 85 pts in Q1:06. Now, at almost half the recent high at 47 pts (see table in full report), there is a clear trend that broad-based weakness in economic activity has become entrenched with the recent adverse global developments (in particular the reigning uncertainty over Europe and now Chinese economic growth), clearly weighing more heavily on business sentiment.
With business confidence levels indicating that less than half of business leaders are satisfied with prevailing economic conditions, the outlook for fixed investment is uninspiring. Following yesterday’s larger-than-anticipated easing in vehicle sales growth data for August confirming the broad-based slowdown in the domestic economy, we believe that dialogue for further rate cuts may be imminent.