NAB’s business customer satisfaction ratings have improved compared to rivals, new figures show.Business confidence in December and the first half of January showed a small drop but was still in positive territory, according to the NAB business survey, despite the recent global market turmoil.
The index fell to 3 in December from November’s 5 reading, while the business conditions index fell to 7 from 10, according to the survey.
NAB business surveys are usually taken at the end of the month, but the survey for December was taken on January 15, meaning that business reaction to the recent market turmoil is included.
“Recent financial market turmoil highlights the risks to the outlook, but has not fundamentally changed our view of the Australian economy,” said NAB Group chief economist Alan Oster.
“While business confidence took a step back… the index remained encouragingly resilient – and positive – with the index only falling from 5 to 3.”
Business conditions, he said, were at “quite elevated levels, despite also easing a little in the month.
“The NAB Business Conditions Index fell to +7 points over the period (from +10 in November), which is still above the long-run average of the survey (+5 points).”
“This outcome suggests there are no real signs (beyond normal monthly volatility) that there is a fundamental weakening in the non-mining recovery,” Mr Oster said in a statement.
Resilience in both business confidence and conditions needs to be maintained over coming months if the non-mining recovery is to remain on track, he said.
ANZ economist Daniel Gradwell said the “soft” result was “likely impacted by the timing of the survey”.
“Although the importance of global events on domestic confidence should not be downplayed, we would caution against reading too much into one soft result. If some form of calm returns to markets, a rebound next month would not be surprising.”
Commsec chief economist Craig James said the result was reasonably good.
“There will always be short-term bumps along the journey taken by Aussie businesses,” he said.
“And while business confidence and conditions both eased a touch in response to recent global jitters, the long-term position hasn’t changed. In fact the annual average of the business conditions index hit a fresh seven-year high in December.”
Consumer confidence has also taken a hit in January.
Global market turmoil hit Australian consumer confidence badly in January, with a fall in Westpac’s monthly index and ANZ’s weekly index confirming a marked drop in sentiment.
The Westpac Melbourne Institute Index of Consumer Sentiment fell 3.5 per cent in January to 97.3 from 100.8 in December.
“The index is at its lowest level since September 2015, but remains 4.3 per cent above its level of a year ago,” said Westpac chief economist Bill Evans last week.
“The spate of negative news on the international front and the spillover effect on financial markets” impacted consumers, he said.
The Westpac figure confirms the sentiment reported in the ANZ-Roy Morgan weekly consumer confidence index, released on Tuesday. That index declined 0.8 per cent in the week ended January 17 , following a 1.9 per cent fall the previous week.
Further losses on the share market amid ongoing concerns around China’s economic growth prospects are likely to have weighed on confidence, said the bank.
“Consumer confidence fell a modest 0.8 per cent last week, leaving levels just a tick (0.4 per cent) above their long run average,” said ANZ co-head of Australian Economics, Felicity Emmett, last week.
“This follows a dip in the previous week which was likely driven by news flow on global financial market volatility and concerns over China’s economic growth.”
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