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Business confidence at 2-year low

Business confidence at 2-year low

(8 September 2015 – Australia) Business confidence slipped to its lowest level in over two years, according to the latest National Australia Bank (NAB) survey, with concerns over China cited as a key contributor to the pessimism.

The bank's business confidence index slipped from 4 points to 1 point between July and August, leaving it at its lowest level since mid-2013. Significantly, the bank said that the gains posted since the Coalition government's May budget have now been undone.

According to the Index, confidence decreased across industries, although mining and construction recovered some of last month's large drops.

Business conditions have improved across most categories and sectors, with retail up 13 points to 17 and construction ahead 10 points to 6. By measure of conditions, trading, profitability, forward orders and exports were all up, while employment was unchanged at minus 1 and stocks dropped from 2 points to 1 point.

"This outcome adds to recent evidence that the long-anticipated recovery in the non-mining economy is gaining momentum, even though mining weakness largely masks the improvement in headline indicators, such as the recent national accounts," said NAB's chief economist Alan Oster.

"But while the trading and profitability components of the index have improved markedly, employment continues to lag well behind – a trend that is difficult to reconcile with strong employment growth reported by the Australian Bureau of Statistics."

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