Business confidence improved slightly in December despite challenging economic conditions in the Eurozone, though conditions remained flat across the majority of industries.
Business confidence rose 1 point to +3, according to the latest NAB Monthly Business Survey, but still sits below the long-run average of +6. The result is a good sign for businesses though, given the ongoing instability in the Eurozone.
“At the time the monthly survey was taken, data out of the United States was more positive, while the fear of a European debt crisis remained very elevated,” the survey said.
Confidence was strongest in construction (+12), mining (+11), wholesale (+10) and manufacturing (+9). Finance/business/property (-1) and transport & utilities and recreation & personal services (both +2) were the least confident.
Conditions remained unchanged at +1 in December, though the index remains consistent with the long-run average, suggesting the economy is running at close to trend.
Conditions were divergent across the various industries, the gap between the strongest and weakest industries has narrowed over recent months, as the rate cuts in November and December continue to help interest rate sensitive sectors of the economy.
Conditions were strongest in transport & utilities (+17) and mining (+10), while manufacturing and retail were weakest as -13 and -4 respectively.