Australia’s business conditions nudge higher in September, strongest since global financial crisis

Australia’s business conditions nudged higher during the month of September, rising slightly to 14.8 from 14.0. Conditions remain below the peak seen through 2017-18, but are otherwise the strongest since the Global Financial Crisis (GFC).

The details of the report were mixed, although most indicators remain around encouraging levels. Profitability rose again, building on the sharp improvement seen in August, which suggests that a continuation in solid employment growth.

On the other hand capacity utilisation fell in September, and the trend improvement of recent years appears to have stalled. However, it still points toward the economy making further inroads into reducing the unemployment rate.

Meanwhile, the results were also mixed across the states, with Victoria and South Australia posting an improvement in conditions, while Queensland, Western Australia and Tasmania fell. New South Wales was flat. Looking through the monthly volatility, conditions in all states are above their long-run averages. Tasmania is leading the way on this measure, likely supported by strong housing and tourism sectors.