The analysis team at NAB points out that according to their latest quarterly business conditions survey of Australian economy, expectations for activity lifted in both the near term (3 months) and the longer term (12 months).
“Overall, leading indicators from the Survey clearly point to an improving economy, at least in the near-term (and prior to the disruptive effects of Cyclone Debbie). While the non-mining economy is generally improving, the drag from the mining sector also appears to be waning, assisted by higher commodity prices and the near completion of the investment cycle downturn.”
“Expectations for forward orders (3 months ahead) were stronger as well in Q1, lifting to quite solid levels – near-term expectations are at their highest level since the GFC. Near-term expectations for profitability also jumped, while longer-term expectations (12-months ahead) improved modestly.”
“Stocks can be another indicator of near-term activity. The stocks index rose again in the quarter, but is still slightly below recent highs. Nonetheless, the long-term trend shows a gradual improvement in response to strengthening trading conditions and positive orders. Firms had previously been reluctant to restock given uncertainty around the outlook, as well as cost and other competitive pressures. The gradual improvement in orders might suggest a slow shift in firms attitudes around the outlook.”