- James Glenn, NAB senior economist
Australia's business confidence dipped in August due to growing uncertainty about health of the Chinese economy. National Australia Bank's business confidence index decline to +1 last month, from +4 in July, hitting the lowest level since mid-2013. Nevertheless, business conditions improved considerably in August, suggesting investment and employment settings may start to improve soon. NAB's measure of business conditions jumped 5 points to +11 in August. The survey's index of sales leapt to +20, from +12, while profitability climbed five points to +12. Forward orders increased two points to +5, whereas the index of employment stayed in negative territory at -1. The capital expenditure index was unchanged at +6, remaining just above its long-run average. This is likely to be positive news for the Reserve Bank of Australia, which is counting on a rise in spending by companies outside of the mining sector.
Australia's resource-rich economy has slowed over the last year as declining commodity prices and the end of a mining investment boom dragged down economic growth to an annual rate of 2.0% in the second quarter, compared with rates closer to 3.0% in 2014.
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