 Business
 confidence recovered in September from its worst reading in two years, 
according to the latest National Australia Bank survey, as industry 
captains welcomed Malcolm Turnbull's replacement of Tony Abbott as Prime
 Minister and global market upheaval subsided.
Business
 confidence recovered in September from its worst reading in two years, 
according to the latest National Australia Bank survey, as industry 
captains welcomed Malcolm Turnbull's replacement of Tony Abbott as Prime
 Minister and global market upheaval subsided.
NAB
 said on Tuesday that its main business confidence index jumped from 1 
point in August - its lowest level since mid-2013 - to 5 points in 
September. The results, gleaned from a survey of about 400 companies in 
the last week of September, suggests business support for Mr Turnbull, 
and relief at the end of leadership uncertainty within the Liberal 
Party.
However,
 the confidence index remains below its mid-year peak, and was not 
broad-based across all industries. Sentiment in mining, construction and
 finance fell, the last two perhaps because of perceptions that the 
residential housing boom is faltering.
"Business
 confidence recorded a partial recovery in September, increasing to 5 
index points from 1," NAB economists, led by Alan Oster, wrote.
"It
 is not clear to what extent this reflects the change in leadership of 
the Liberal Party, as solid business conditions and some dissipation of 
financial market jitters may have also contributed to the result," they 
said.
The
 main business conditions index was flat at 9 points, with trading, 
profitability, forward orders, stocks and exports all down on their 
August levels. Employment, however, climbed from negative 1 in August to
 4 points in September.
Within
 this, however, NAB noted sharper convergence between sectors and 
industries, with services continuing to perform much better than 
traditional industrial mainstays such as mining and manufacturing.
Levels
 of confidence, too, varied widely between different industries, with 
the improvement concentrated in transport and utilities, which were up 
14 index points, and personal services, which surged 12 points.  Not
 surprisingly, given weak commodity prices and softening demand from 
China, mining companies were the least confident, registering a negative
 14 index points.
NAB said the latest results suggested the lower Australian dollar had helped the "non-mining sector recovery" build momentum.
"This
 is particularly apparent in industries thought to be highly responsive 
to currency changes in the near-term, including personal and business 
services," the bank said. 
It
 stuck to forecasts that the Reserve Bank of Australia would leave rates
 on hold at 2 per cent for the forseeable future, with no further 
monetary easing.
"Weak
 commodity prices and falling mining investment will remain a drag on 
economic activity and downside risks from offshore remain pronounced," 
the bank's economists said.
"However,
 we find it difficult to mount a case for further policy easing on 
purely domestic grounds and view market pricing for another 25 basis 
point cut over the coming six months as overly pessimistic." 
Source: sydneymorningherald

 
 
 
 










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