Business Confidence Plummets Amidst Economic Challenges
Business Confidence Plummets Amidst Economic Challenges
3
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
In an unexpected turn of events, business confidence has experienced a substantial decline this November, marking a significant shift from last month's brief positive outlook, according to the National Australia Bank (NAB).
A recent NAB survey revealed a notable drop in business confidence by eight points, taking it to minus three, accompanied by a five-point decline in business conditions.
The downturn is particularly pronounced in the manufacturing and retail sectors, which showed the weakest performance in goods production and distribution. Conversely, the services sectors are holding strong, indicating disparities in economic resilience within the different sectors. NAB's findings further revealed that all sub-components of business conditions are now at or below average levels.
Geographically, South Australia and Victoria experienced the weakest conditions, while Queensland was the sole state to exhibit an improvement. "Confidence fell sharply in November and is now back below average," stated NAB Chief Economist Alan Oster. He acknowledged the persistent trend of below-average business confidence despite last month's optimistic observations.
The survey's negative sentiment is echoed in declining forward orders from the mining and retail industries, sectors that have lagged behind the long-term average throughout most of the year. However, service sectors such as recreation, finance, and property services continue to perform well above their counterparts.
On a positive note, capacity utilisation remains robust at 82.4%, surpassing the long-term average. Capital expenditure has also increased by 10 points, indicating sustained investment activity. Additionally, consumer prices show potential disinflationary trends, with retail prices taking a 0.6% dip and recreation and personal services seeing a 0.7% decline. Overall, output price growth held stable at a quarterly 0.6%.
Mr. Oster highlighted the mixed economic signals: "Overall, the survey points to ongoing soft growth in Q4 though with capacity utilisation unchanged at an above-average level. It will likely take more time for price pressures to fully normalise."
These developments emerge in the context of NAB's Australian housing market analysis, which, alongside data from CoreLogic, alludes to a correction phase for the real estate market as December progresses.
The report indicated that house values in four out of eight capitals decreased, led by Melbourne. Despite 22 consecutive months of growth previously, November's overall house price increase stirred faintly at just 0.1%. Notably, Perth stood out with a 1.1% increase, reflecting annual growth of 3% for the quarter, albeit much lower than earlier figures.
Highlights revealed muted growth in Perth, Brisbane, and Adelaide, contrasting with declines in Melbourne, Darwin, and Sydney where high-end properties faced more significant depreciations. A persistent increment in regional housing, recording a 1.1% rise over three months, shows diversification in house price trends nationally.
Factors such as rising inventory levels, particularly visible in Sydney and Melbourne, underscore shifting dynamics; listings across major cities have surged 16% this quarter. This is met with a decline in home sales, particularly felt in Sydney.
With rental prices continuing their climb-albeit at a slower pace-Tim Lawless of CoreLogic states, "Housing markets are likely to be arriving in 2025 on relatively weaker footing, with value growth losing steam...advertised stock levels rising, unaffordability at record highs, and demand no longer keeping pace with the flow of new listings." Until interest rates fall, pressure on housing trends appears unlikely to ease significantly.
Published:Tuesday, 10th Dec 2024 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
The Reserve Bank of Australia (RBA) has decided to keep the official cash rate steady at 3.60% during its November 2025 meeting. This decision reflects the central bank's ongoing concerns about inflation, which has risen above the target range of 2-3% and is expected to remain elevated for some time. - read more
ANZ Bank has revised its cash rate forecast, now expecting no cuts until February 2026. This adjustment aligns with similar revisions by other major banks, reflecting a collective response to recent economic data and RBA communications. - read more
The Reserve Bank of Australia (RBA) has released its November 2025 Statement on Monetary Policy, highlighting concerns about rising inflation and providing insights into the future of the Australian economy. - read more
The Reserve Bank of Australia (RBA) has decided to keep the official cash rate unchanged at 3.60% during its November 2025 meeting. This decision reflects the central bank's cautious approach in balancing inflation control with employment objectives. - read more
ANZ has adjusted its forecast regarding the Reserve Bank of Australia's (RBA) next cash rate cut, now anticipating the reduction to occur in February 2026. This revision aligns with similar adjustments by other major banks, reflecting a collective response to recent economic data and RBA communications. - read more
Navigating the complexities of loan repayments can be daunting, but understanding the components and their impact on our financial health is essential. In Australia, a wise approach to loan repayment not only alleviates financial strain but directly influences our credit scores and future borrowing capacity. - read more
Financial health is a crucial aspect of overall well-being, particularly in the ever-evolving economic landscape of Australia. The capacity to manage personal finances effectively not only provides a sense of security but also opens doors to opportunities that might otherwise be out of reach. As such, mastering the art of money management is an indispensable skill for Australians from all walks of life. - read more
Debt management involves strategies and practices designed to help individuals control their debt and maintain a healthy financial standing. It includes everything from budgeting and tracking expenses to negotiating better terms with creditors and consolidating debts for easier repayment. - read more
When applying for a loan in Australia, it's essential to have a clear understanding of the loan application process. Whether you are applying for a home loan, personal loan, or business loan, knowing the necessary steps and having all the required documents ready can save you time and frustration. - read more
Need Help Finding a Loan?
Find out now if you qualify and
compare rates, offers and options from multiple lenders - without a credit check!
All finance quotes are provided free (via our secure server) and without
obligation. We respect your
privacy.
Knowledgebase
Conventional Loan: A type of mortgage loan that is not insured or guaranteed by the government.
