Australia: SME confidence and conditions continue to ease - NAB

In view of analysts at NAB, Australia’s Small and Medium Enterprise (SME) business conditions continued to decline in Q4 – falling to +8 after having trended down in the past three quarters.

Key Quotes

“Confidence has also declined, falling to 0 index points in December, suggesting on average. At these levels, conditions remain just above average, though confidence is now well below average.”

“According to Alan Oster, NAB Group Chief Economist: “Conditions for the SME sector pulled back from the high levels reached in early 2018. This trend certainly continued in Q4 with medium and large size SMEs seeing a further deterioration. The improvement in small firms was a positive sign but they remain at low levels. Overall confidence in the sector has also deteriorated and is now below average – something to closely watch as it points to further weakening in business conditions”.”

 “There was a broad based deterioration in forward looking indicators in the quarter, suggesting that the weakening trend in SME business confidence and conditions is likely to continue. Expectations for conditions, employment and capex 3 and 12 months ahead declined, as did the forward orders index. Capacity utilisation remains high though also eased in the quarter.”

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