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Catherine Birch, senior economist at ANZ, notes that Australian business conditions weakened slightly to 2.4 in July from 3.6 in June.

Key Quotes

“After reaching a seven-month high in June, capacity utilisation fell back down to 80.9%, and the employment index fell below zero for the second time in four months. Although there was some improvement in profitability and forward orders, they remain very weak, while trading and exports were also down. Labour cost growth moderated, but growth in purchase costs accelerated.”

“Business conditions in construction collapsed in July, down 19.0 points from the eight-month high in June. Despite the prospect of tax cuts boosting household spending in H2 2019, retail conditions fell 10.6 points to a historical low of -31.9. Falls in wholesale (-7.8), recreation (-1.5) and manufacturing (-0.6) also contributed to the deterioration in overall conditions. This was partially offset by improvements in mining (+12.3 points), transport (+11.6) and finance (+8.3).”