Australia business conditions slip in February
(Corrects grammar in headline.)
SYDNEY, March 12 (Reuters) - A closely-watched measure of
Australian business conditions eased in February, dragged by
falls in profitability and sales and pointing to cooling growth
ahead, although the employment index was surprisingly resilient.
The National Australia Bank's index of business
conditions, released on Tuesday, slipped 3 points to +4 in
February, below the long-run average of +6.
The survey's volatile measure of business confidence
declined 2 points to +2, having been much softer than conditions
in recent months.
NAB said the February survey was based on a larger sample
and was conducted well after the January holiday period when
global investment markets were volatile.
Forward orders, the most reliable indicator of domestic
demand, slipped 4 points to -2 in the latest survey while the
reading on employment held at +5.
The labour market has been one of the strongest sectors of
an otherwise mixed economy, with the jobless rate declining
steadily to a 6-1/2-year trough of 5 percent.
"Leading indicators of the labour market will be important
over the next few months as we assess the lags between output
and employment," said NAB Group Chief Economist Alan Oster.
Steep falls in home prices and a tightening of lending
conditions by banks have combined with subdued wage growth and
inflation to darken the outlook for the economy, which slowed
sharply in the second half of 2018.
The central bank had touted the strength of business
conditions as one reason for optimism so February's dour data
will be unwelcome. It will also add to views a rate cut is
needed to boost economic growth and inflation.
Investors have already narrowed the odds on a cut
in interest rates this year. RBA Governor Philip Lowe also
tempered a long-held tightening bias last month and said an
easing could be just as likely as a hike.
The February survey's measure of sales dipped 2 points to
+8, while profitability stumbled 4 points to +1.
Retail was again the worst performing sector while
construction saw a particularly sharp decline in conditions.
Conditions were strongest in finance, business & property
services and transport and utilities.
(Reporting by Swati Pandey; Editing by Sam Holmes)
First Published: 2019-03-12 02:30:01
Updated 2019-03-12 02:43:25
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