A monthly gauge of business confidence compiled by NAB fell into negative territory in July, but the bank’s economists point to robust growth following COVID-19 lockdowns as a note of optimism.
Business confidence fell to -8 in July from 11 in June and 20 in May, as lockdowns weigh on activity.
“The survey shows that the strength in the business sector seen in early-to-mid 2021 has faded on the back of fresh disruptions in the economy but it has not yet deteriorated to the lows seen in early 2020,” NAB economists said.
Strong momentum in the lead up to the recent run of lockdowns around the country indicates the potential for a quick rebound once restrictions are relaxed.
“The hope is that once restrictions are eased, the economy will rebound relatively quickly, consistent with the experience through the pandemic to date, and resume a strong growth trajectory – and a return to strong capex and employment plans.”