- NAB
Australian business confidence surprisingly rose at to a one-year high, while business conditions jumped to the highest level in four years in July amid a surge in construction activity. The data added to signs that businesses are starting to take on more investment opportunities, thereby helping boost economic recovery. The NAB Business Confidence Index advanced to 11 in July up from 8 in the previous month, while conditions gauge skyrocketed from 2 to 8 in the reporting period, where any figure above the zero-threshold indicates an improvement in conditions. The Australian Dollar stayed in a tight trading range following the release of upbeat data, trading in the upper end of the 0.92 level versus the Greenback.
NAB revised its outlook for the nation's unemployment, saying the jobless rate is now likely to rise to 6.5% by the end of 2014, from an earlier projection of 6.25%, on the back of weaker growth and changes to ABS measurement. Last week official data showed the jobless rate jumped to 6.4% in July. NAB expects that GDP growth was soft in the second quarter, and downgraded its 2014-2015 growth forecast to 3.1%, from an earlier prediction of 3.3%. Last week, the Reserve Bank of Australia also cut its growth forecast for fiscal 2015 to a range of 2% to 3%, compared with its earlier estimate of 2.25% to 3.25%. The cash rate is likely to remain unchanged until late 2015 but there is a potential of a cut, NAB said.
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