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According to Andrew Hanlan, Research Analyst at Westpac, it was a mixed start to the new financial year for the Australian economy, the NAB business survey suggests as the business confidence lifted and employment conditions strengthened, but business conditions moderated, so too forward orders.

Key Quotes

“Recall that in July, billions of people around the globe were transfixed by the greatest show on earth, the World Cup. No great surprise that the consumer sectors had a soft month – business conditions for retail slipped to -5.”

“In addition, businesses likely brought forward investment spending ahead of the new financial year for tax purposes – potentially more than in past years, in the context of the current investment upswing.”

“The business confidence index rose by 1pt in July to +7, remaining around average. This is despite ongoing international trade tensions.”

“The business conditions index declined by 2pts to a still above average +12, extending the moderation evident since April. Trading conditions declined by 4pts to +17 and profitability fell by 5pts to +10.”

“The employment conditions index rebounded, up 5pts to an elevated +10, reversing falls over the past two months.”

“The survey correctly foreshadowed the jobs boom of 2017. The survey suggests that the employment index is consistent with jobs growth near-term of around 23k/month, well above the 17k/month pace required to keep the unemployment rate steady (assuming an unchanged participation rate).”