Hockey’s hand­outs help lift con­fi­dence

Townsville Bulletin - - NEWS -

BUSI­NESS con­fi­dence has jumped to a near two- year high but is likely to be dented by China’s fi­nan­cial tur­moil.

Na­tional Aus­tralia Bank’s con­fi­dence barom­e­ter rose two points in June to 10 points – its high­est level since Septem­ber 2013. All in­dus­tries out­side of min­ing were show­ing signs of op­ti­mism, NAB economist James Glenn said, ow­ing to low in­ter­est rates, a fall­ing Aus­tralian dol­lar and the Fed­eral Gov­ern­ment’s busi­ness­friendly Bud­get.

But NAB’s monthly busi­ness sur­vey was con­ducted be- fore the cul­mi­na­tion of Greece’s debt cri­sis and the re­cent tur­moil on China’s main­land share­mar­ket.

“Grow­ing jit­ters on global mat­ters, es­pe­cially in re­gards to China, sug­gests that cur­rent lev­els may be hard to sus­tain,” Mr Glenn said.

June’s lift in con­fi­dence was wel­comed by busi­ness lead­ers and gave the Aus­tralian dol­lar a boost, ris­ing from just un­der 74 US cents to about 74.25 US cents.

Aus­tralian In­dus­try Group chief economist Julie Toth said higher con­fi­dence could sig­nal a turn­ing point for the econ­omy’s non- min­ing sec­tors.

“Ser­vices, which is the largest part of the econ­omy – over 70 per cent na­tion­ally – showed quite a strong im­prove­ment in June,” she said.

Busi­ness con­di­tions also strength­ened in June, the NAB sur­vey showed, lift­ing five points to its high­est level since Oc­to­ber last year. Aus­tralian Cham­ber of Com­merce and In­dus­try chief ex­ec­u­tive Kate Car­nell said the Ab­bott Gov­ern­ment’s small- busi­ness stim­u­lus was hav­ing an im­pact.

“Since the Bud­get was brought down in May, busi­ness con­fi­dence has re­ally turned a cor­ner,” she said.

Greece’s debt cri­sis is a long- run­ning saga and is un­likely to im­pact next month’s con­fi­dence fig­ures, Ms Car­nell said.

“There doesn’t seem to be any in­di­ca­tion out of Europe that will lead to any form of con­ta­gion with Italy, Spain or Por­tu­gal,” she said. But the min­ing sec­tor is tak­ing a bat­ter­ing from China’s slow­ing econ­omy, plus a weaker Aussie dol­lar and slump­ing iron ore prices, Ms Car­nell said.

NAB economist James Glenn.

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