Australia: Business conditions weaken further – ANZ

David Plank, head of Australian economics at ANZ, notes that the Australian business conditions fell to 0.6 in May.

Key Quotes

“The sub-indices were mixed: profits, capacity use, and trading fell, while employment, exports, labour costs and purchases costs rose modestly. At 2, the employment index is consistent with modest jobs growth, while capacity use points to a sharply higher unemployment rate.”

“Conditions fell in New South Wales and Victoria to well below average levels, though the three-month moving averages are still around or close to average. Conditions also fell a touch in South Australia, though are still strong; and they remain above average in Tasmania – though well off recent highs. Conditions continued to deteriorate in Western Australia.”

“The change in conditions across industries was mixed. Mining fell, but remains elevated. Retail conditions deteriorated very sharply, to the weakest monthly level since March 2001. Transport was down by some margin, while the finance and recreational sectors fell a smaller amount. Manufacturing, construction and wholesale all rose somewhat.”