Australia business confidence down in July in wake of inconclusive Federal elections

The Australian business confidence remained weak during July following the inconclusive Australian Federal Election at the start of previous month. The fall in Business Confidence comes despite an upward trend witnessed in the Australian markets in July.

According to National Australia Bank monthly business survey for July, business conditions came in at 8 from 12 in June, while business confidence fell to 4 from 6 in June. The survey noted that business conditions remained well above the long-run average and sales were strong. Also, employment index held above average at 4; forward orders and capex remained above the long-run average.

On the other hand, Roy Morgan Research’s Business Confidence fell 2.8 percent to 116.1 in July following the inconclusive Australian Federal Election at the start of July. The fall in business confidence in July means that the index has dipped just below the 6-year average of 116.7.

According to Roy Morgan’s survey, net expectations of business performance over the next 12 months have fallen to 22.4 points, down 6.3 points in July and net views of whether the next 12 months will be a 'good/bad time to invest' are now 16.5 points, down 6.6 points in July.

While the Roy Morgan Business Confidence results are based on 982 interviews with a cross section of businesses across Australia, the NAB business confidence indicator is derived from a survey of about 1,000 business managers across Australia.

Meanwhile, the Reserve Bank of Australia cut interest rates last week to a record low 1.50 percent from 1.75 percent. The central bank said Friday it expects inflation to remain below its two to three percent inflation target band for most of the period till 2018-end.