The NAB have just released their Australian business survey for November with both confidence and conditions falling for the month. Confidence fell 4pts to +1 with the reading the lowest seen since July last year. Reflective of the overall trend, this measure has fallen 7pts over the past 6 months, the equal-largest half-year decline since August 2011. Having printed at a multi-year high in October business conditions also fell, dropping 8pts to +5. Underpinning that outcome gauges on trading and profitability slumped 9pts to +11 and +6 respectively. Elsewhere the employment gauge dipped 2pts to 0 while export orders held steady at 0 despite increasing tailwinds generated by the falling AUD. In what was one of the few bright spots to come out of the survey the measure on forward orders also held steady at +4.
Joining myself and several others in calling for additional monetary policy easing in Q1 2015, the NAB economics team had this to say: ‘Softer commodities and labour market outlook mean we have changed our rate call to two cuts of 25 bp in March and August 2015, then on hold until late 2016. GDP forecasts cut reflecting weaker history and terms of trade: 2014/15 2.5% (was 2.9%); 2015/16 3.0% (was 3.2%). Unemployment rate now to peak at around 6¾% (was 6½%).’