In February, Australian businesses experienced a slight rise in sales and profits, although a significant drop in confidence was noted, according to NAB Economics, part of the National Australia Bank. While business conditions marginally improved with small increases in trading conditions and profitability, the business confidence index took a drastic turn, falling to negative 1 from a positive 5 in January. NAB highlights that all industries reported a dip in business confidence throughout the month, with the most substantial declines observed in sectors such as mining, recreation & personal services, and transport & utilities.
Despite this downturn, the sales subindex for Australian businesses showed a positive performance of 8 in February, an increase from 7 in January. Similarly, the profitability subindex also exhibited improvement, moving to a negative 1 from a negative 2. The services segment upheld strong business conditions, while the mining and manufacturing sectors faced challenges, as noted by NAB.
Looking ahead, Australian businesses anticipate sluggish growth accompanied by cost pressures as they project into 2025. The February survey indicates a trend towards below-average growth, compounded by the reality that input cost pressures have outpaced output price growth, reflecting ongoing challenges within the business realm.
This data comes despite some signs of improvement in economic activity in the latter half of 2024, as stated by NAB..