Business confidence regresses in Australia
Big businesses are losing confidence, according to the latest quarterly report from the National Bank of Australia (NAB).
The slip is affecting both medium-term enterprise growth and capital expenditure plans. Overall confidence among larger organisations has fallen below its long-term average, proving weaker than smaller entities and the wider economy of the country.
Confidence among the Australian Stock Exchange biggest 300 companies is now at the lowest point since the fourth quarter of 2012.
Mining leads the decline
“The decline was driven by large mining firms, with overall confidence weakest in mining and construction by some margin,” explained NAB Group Chief Economist Alan Oster.
Business conditions also deteriorated last quarter, but in more positive news, they stayed high above the long-term average.
“Weaker business conditions reflected a drop in profitability and slightly weaker trading conditions, which offset stronger, albeit negative, employment conditions,” surmised Mr Oster.
Export market boosted
While not noted as immediately positive, the falling dollar has led to a growth in the number of exports, as the currency’s fluctuation had made Australian products more attractive to buyers from overseas.
As things stand, markets around the globe are effectively getting more value for money from Australia, leading to an increase in both export sales and orders.
While much of NAB’s latest findings aren’t as positive as previous reports, businesses can negate market fluctuations through sound strategic planning.
When building a plan, working in ways to deal with issues surrounding business confidence should be considered. This is only compounded in B2B transactions, as during periods of volatility in a less-than-perfect market, other companies will take more convincing to engage in business.
With December, January and February traditionally slow months in the vast majority of sectors, the next quarters result will likely follow suit with the latest findings. However, enterprises and industry analysts alike will be keeping an eye on whether business confidence recovers deeper into the year.