NAB’s Monthly Business Survey – November 2014
"Last months spike in business conditions was again short-lived, pulling back towards long run average levels in November. Despite the drop, the overall trend is still looking much better than 12-18 months prior, while levels of capacity utilisation have continued to improve. Orders held up reasonably well, which reflects well on near-term demand. The fall in conditions was driven by all three components (sales, profits and employment), although the last remains the weakest, pointing to only very modest growth in employment – insufficient to prevent a further rise in the unemployment rate. But while last months spike was relatively broad based, the pull back in November was much more mixed across industries – concentrated in retail, manufacturing and service industries. We are yet to see any clear beneficiaries of the AUD depreciation."
"Firms uncertainty over the outlook for their industries was reflected in a further erosion of business confidence. Confidence levels vary greatly across industries, although the spread narrowed considerably in the month. Services have been replaced with construction as the most optimistic. Other leading indicators are mixed. Forward orders maintained last months rise, but the ‘bellwether’ wholesale industry remains weak."
"Softer commodities and labour market outlook mean we have changed our rate call to two cuts of 25 bp in March and August 2015, then on hold until late 2016. GDP forecasts cut reflecting weaker history and terms of trade: 2014/15 2.5% (was 2.9%); 2015/16 3.0% (was 3.2%). Unemployment rate now to peak at around 6¾% (was 6½%)."
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