Business confidence in Australia on the rise

Business confidence in Australia recorded an unexpected increase in June, with firms apparently shrugging off the sharp deterioration in consumer confidence that followed May’s Federal budget.

NAB’s most recent survey of more than 400 firms showed its index of business confidence ticked up a point to +8 in June, just above the series' long-run average. Stronger sales are further contributing to elevated confidence levels, with the survey suggesting this has encouraged firms to invest and rebuild their inventories.

Reportedly, conditions improved across industries, with construction in the lead as home building is gathering steam.

In line with that, John Edwards, a member of the Reserve Bank and former chief economist at HSBC, said in ABC interview that the doom-and-gloom messages about the Australian economy were inconsistent with the country's bright future.

“The mining boom was not as big as is widely believed, the income gain not nearly as big as widely believed and of that income gain we saved the lot,” he said.

“We have hugely developed our capital stock, our human capital. So … I think on the whole, the Australian economy and Australians performed quite well [since the boom commenced in 2003, ed].”

Leave a Reply

Send this to a friend