Catherine Birch, senior economist at ANZ, notes that Australian business conditions recorded another small improvement in October, hitting a three-month high of +3.0, but it is too early to tell if this will be sustained.
Key Quotes
“Confidence also rose slightly to +1.7. Forward orders (up 5.1pts), profitability (up 1.6pts) and trading (up 2.4pts) all rose. Capacity utilisation recorded a slight decline to 81.7%, while the employment index and labour cost growth were largely flat.”
“Most states recorded improved business conditions during the month; Queensland was the only state to deteriorate. Most states are running well below their long-run averages, with Queensland, Victoria, and Tasmania in the weakest positions (smoothed using three-month averages). New South Wales has improved over the past few months to just below its long-run average.”
“Mining, construction, finance, and recreation services all contributed to the monthly gain in business conditions. Manufacturing and transport were the largest detractors. Retail business conditions have been stable for the past few months but remain deep in negative territory. Mining business conditions are marginally above their long-run averages but all other industries are in negative territory (smoothed using three-month averages).”
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