In the view of the Analysts at Australia and New Zealand Banking Group (ANZ), Australia’s NAB business conditions and confidence held up a little better than expected in January.
“Business conditions were largely unchanged in January at +2.6pts. Business confidence improved a little but remained in negative territory at -0.8pts.
The employment index dropped 3.5pts to a six-month low of +0.8pts. This is broadly consistent with the loss of traction seen in some labour market indicators in late 2019.
NAB indicated that the bushfires likely affected this month’s results, largely in New South Wales and Victoria and in recreation and personal services. However, the results would not fully reflect the escalation in the spread of and policy response to coronavirus.
It seems the tentative signs of improvement in the private sector late last year have stalled and may reverse in the near term.
The test will be how quickly the private sector can regain positive momentum once coronavirus is contained.”