NAB Business Confidence rose to +4 in Q4

Thursday, Feb 04 2016

Business outlook remains positive despite some pull back in the final quarter of 2015. Suggests global uncertainties continue to be the greatest risk. “The Survey is confirming yet again that despite the issues facing the mining sector, Australia continues to enjoy a relatively healthy, vibrant and adaptive economy”, said NAB Group Chief Economist Alan Oster. However, global market volatilities highlight the growing risks to the outlook. “The longer these market volatilities persist, the more likely we will see an impact via sentiment channels”, said Mr Oster.

Prior to the recent market retreat, however, business confidence actually recorded a rebound, lifting 3 points to +4 index points. This in large part is a reflection of business conditions (how firms feel about their own business), which also held up at elevated levels (+9 index points) despite easing back slightly in the quarter. These outcomes are broadly consistent with what has been reported in the monthly NAB Survey, suggesting that the non-mining recovery has remained resilient. According to Mr Oster, “the real insight from this survey is seeing how firms are feeling about the outlook for their business and the economy. It certainly seems like they are remaining quite upbeat about the outlook, which suggests good things for the labour market and future investment.”

Aussie is currently being traded around 0.7180 area. Pair is likely to find support around 0.71 handle and resistance above 0.7250 level. Later today, in the US session, Unemployment Claims figures are scheduled for a release.

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