Haver Analytics
Haver Analytics
| Jul 09 2024

Australian Business Confidence Runs a Downtrend Despite Uptick

Aussie business confidence Business confidence in Australia rose to 3.6 in June from -2.3 in May. Its rank percentile standing at the 31-percentile mark remained in the lower third of its historic queue of values. The 3-month moving average (MAV) is rising, but the 12-month MAV is falling. Business conditions eroded in the month.

The rank percentile standings (Rank %) for the headline of business conditions has a 31-percentile standing. Apart from prices, the highest percentile standings are for capacity utilization (87.3% standing), exporter sales (54.3 percentile), and exports (49.0 percentile). But prices and costs have standings of 86th percentile, 75th percentile, and 69th percentile.

The final column shows changes among the 13 components of the index are higher for 9 items and lower for 4 items, but this is after more than four years and the strongest gain is 2.4 points for inventories. On the negative side, capital expenditures are lower by 10.1 points, forward orders are lower by 8.9 points, profitability is lower by 2.2 points, and business conditions are lower by 0.4 points.

Overall the breadth of the changes from 12-months to six-months and from six-months to three-months show weak breadth of change. Over 12 month compared to the previous 12 months, only 12.5% of components are improving. Over 6 months compared to 12 months, 12.5% improve. Over 3 months compared to 6 months, 37.5% of the categories are improving- that’s a step up. But it is still barely over one-third of the sectors improving. That’s thin gruel for good news.

The bottom line on the Aussie index is that it is weak. Its standing is weak. Most components are very weak, and components broadly are still weakening. It is hard to pick through that minefield and find any good news.

  • Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media.   Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.

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