Despite significant volatility in global markets, Australia’s business environment remains “robust”, with businesses positive about the outlook continuing to improve over the next quarter, says NAB.
NAB’s Quarterly Business Survey for the first quarter of 2016 revealed that Australian business confidence is holding up, translating into rising employment demand and improved investment intentions.
NAB Group chief economist Alan Oster said: “We find it encouraging to see that firms are continuing to look past all the ‘noise’ in financial markets to focus on what is going on at home, and in their own business.”
“Persistent market volatility could eventually start to have an impact on the economy via sentiment channels, but at this stage firms actually appear more optimistic about the outlook,” he said.
In the first quarter of 2016, both business conditions and confidence eased modestly, to +9 and +5 index points respectively. However, the report indicated that the outcomes remain solid, particularly in the context of increased volatility in global markets.
Mr Oster pointed out that businesses have revised up their expectations relative to last quarter.
Such optimism, the report said, suggests “good things” for the labour market and future investment.
However, the report also noted that the risks related to the property market, specifically the high level of apartment supply entering the market, are increasing.
“We are certainly starting to see this in the business survey, with residential construction firms recording a notable decline in confidence recently,” said Mr Oster.