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The latest NAB business results aren’t that bad

Chief Economist Harley Dale
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CreditorWatch’s chief economist, Harley Dale, comments on today’s NAB Business Confidence Index. November’s results saw a significant drop to a level of 12, from a downwardly revised 20 in October 2021:

The latest NAB business results aren’t that bad

“One might be forgiven for thinking that the result for the November NAB Business Confidence Index is a tad disappointing. That would be overstating the result. The update shows that business confidence remains well above the long-term average and aggregate business conditions improved again.

“Conditions strengthened noticeably in the retail and transport sectors in November. This is consistent with CreditorWatch data which has already noted that the retail sector – much maligned throughout extended lockdowns – is bouncing back. Related sectors such as food and beverages are getting back into the groove but are still high in terms of payment arrears. It will take time for those who survived to revive balance sheets, customers and a COVID-normal trading environment.

“We have a balance here. An economic recovery is underway, but while some industries and geographical jurisdictions will blossom heading into 2022, some will falter or go backwards before lifting later next year.

“The outcome reflects the November results for the CreditorWatch Business Risk Index, which highlighted that Australia’s economic recovery will take time, patience and won’t happen all at once. There will be larger than normal industry discrepancies, however it is very encouraging that Australia is firmly heading in the right direction.”