- Alan Oster, NAB chief economist
Business conditions and confidence in Australia eased slightly in August following the sharp surge in July, but remained still high, mainly due to optimism in the construction sector. National Australia Bank's survey of more than 400 firms showed business confidence declined to 8 points down from July's reading of 10, remaining robust by historical standards, though. Index of business conditions halved to +4 in August, after the 5-point rise in July. The weaker business survey data suggests the country's economic growth environment will remain muted this financial year as mining investment fades after the end of a decade-long boom boosted by China's demand for raw materials. National Australia Bank revised downwards its fiscal 2014-2015 growth outlook to 2.9% versus 3.1% previously forecast, while revising its fiscal 2015-2016 forecast upward to 3.4% from 3.2%. The Reserve Bank of Australia has kept interest rates at a historic low 2.5% for the past 13 months to stimulate domestic demand.
Separately, Australian Bureau of Statistics showed that number of new home loans granted in Australia rose less-than-expected to a seasonally adjusted 0.3% in July, from 0.1% in the preceding month whose figure was revised down from 0.2%. That missed economists' forecasts for a gain of 1.0%, and down from the downwardly revised 0.1% climb in June.
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