- Alan Oster, NAB chief economist
According to the NAB's latest monthly research, business conditions in Australia remain to be solid in May apart from the mining sector. However, despite companies' robust trading conditions the sentiment has waned, adds the latest NAB business survey. The survey also shows that firms reported slightly lower levels of confidence in May, with that index decreasing by two points to +3.0, further below its long-run average. Meanwhile, the overall conditions index managed to be steady at +10. At this level, the broad conditions index is still well above the long-term average of +5. The following results were in line with recent indicators that confirm a steady economic growth as well as soothe inflationary pressure and will likely not alter the Reserve Bank's plans greatly.
Overall these numbers show a muted reaction to the May 3 rate cut from the Reserve Bank, which failed to bring some power in confidence for businesses. Concerning industries recorded an improvement, services sector was top performer, while manufacturing and finance were the two key sectors to see a decline in conditions. In the meantime, mining and construction remained the only sectors reporting below-average conditions.
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