Survey results on business confidence (released yesterday by the NAB) and consumer sentiment (released this morning by Westpac Melbourne Institute) showed mixed results, with the business measure sliding, but consumers becoming slightly more upbeat. The business survey was collected at the end of July, when the likely make-up of the Senate, with its large cross-bench, was viewed as a hindrance to the Government’s legislative agenda. The consumer sentiment survey is more recent, and captures the positive impact of last week’s rate cut by the RBA.
NAB’s forward-looking measure of business confidence eased a touch from a net balance of +5 in June to +4, slightly below the long term average for this measure of +6. The contemporary measure of business conditions also slipped, from +11 to +8 – the long term average of this measure is +5, so these results imply that conditions are still decent enough. Businesses in service industries generally are doing better than those in mining, transport and wholesaling.
The Westpac Melbourne Institute Index of Consumer Sentiment showed that the headline index bounced 2% in August, after falling in July. The index now is back at 101, meaning there again are more optimistic respondents than pessimists. The underlying details were decent, too, with households reacting positively to the latest interest rate cut from the Reserve Bank, even though the Aussie banks did not pass the reduction on in full to mortgage rates.