National Australia Bank’s quarterly ASX 300 business survey has found that business conditions for Australia’s large corporates continued to decline for the September quarter. However, expectations for business conditions over the coming 12 months remain higher among the ASX 300 than the broader economy. Spiro Pappas, head of institutional banking at NAB observed that while economic uncertainty continues to affect many of Australia’s large corporates, he is anticipating conditions to improve over the coming quarter and he believes that corporates hold the key to recovery for the broader economy. “We’re reaching an inflection point amongst Australia’s corporates and expect to see an improvement in confidence over the coming quarter as businesses prepare to invest for the future, which is a very encouraging sign,” Pappas said. Capital expenditure in the ASX 300 continues to outperform the overall business sector, with 21 per cent of ASX 300 reporting an increase in expenditure in Q3, well above the 10 per cent recorded in broader economy. Larger firms are tipped to maintain this trend over the next year. “The levels of capital expenditure show that while businesses have faced some significant headwinds over the past year when confidence returns we will start to see greater investment in existing projects, new projects and transformational opportunities amongst Australia’s large corporates,” Pappas said. Business conditions for large corporates declined to a net balance of +3 points in September, down from +6 points in Q2. In comparison, conditions in NAB’s Quarterly Business Survey (QBS) were largely unchanged during the same period, at -0.3 points (on a non-seasonally adjusted basis). The survey highlighted the continued multi-speed nature of Australia’s economy with a substantial divergence in business conditions between industry sectors. “The results are backing up the multi-speed nature of the economy and highlight the disparity within industry sectors,” Mr Pappas said.
Posted on: Thu, 02 Oct 2014 00:44:08 +0000
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