Australia NAB: Business sector’s strong run continued in July, wage growth subdued

The National Australia Bank [NAB] data released this Tuesday morning shows the recent strength in the business sector was maintained going into the start of the third quarter. 

The business conditions index rose 1 point, to +15 index points, which is three times the long-run average (+5). Similarly, the business confidence index rose 4 points in July, to +12 index points.

Price and wage measures in the Survey generally weakened again in the month - partly a reflection of elevated rates of underemployment -- despite anticipated pressures from utilities prices.

Key quotes from Mr. Alan Oster, NAB’s Chief economist

Retail conditions have generally improved since the lows of late last year, but the trend appears to be turning down again, with retail once again the worst performing industry in the Survey.

The persistent strength in employment conditions has made us a little more optimistic about the near-term outlook for the labour market. 

There are still longer-term challenges to domestic demand, which will have implications for the labour market, while the ABS underemployment rate is also suggesting that there is still a fair degree of slack in the labour market.