Business confidence is expected to remain weak in the near-term and the gap between weak and strong industries is widening, but businesses remain reasonably confident about conditions 12 months down the track, the National Australia Bank’s quarterly business survey shows.
The survey paints a mixed picture, with business confidence falling five points to six over the three months to June 30, but business conditions lifted by one point to three.
NAB chief economist Alan Oster says the fall in business confidence is “likely to reflect the impact of the high Australian dollar, continued cautiousness of households and concerns about the global outlook on sentiment.”
Confidence for the next three months fell five points to 10, but for the next 12 months, the figure was 28, versus 28 for the previous quarter.
Oster says while business conditions improved slightly in the June quarter, they remain soft with confidence and further weakness expected in the near-term.
“In the quarter profitability rose, employment eased a little and trading conditions were broadly unchanged. Forward orders remained weak and stocks were unchanged, consistent with softer domestic demand in the near-term,” he says.
He added that the gap between weak and strong industries is reaching historical highs, with conditions improving sharply in mining, followed by business and transport and utilities.
“By contrast, conditions deteriorated in retail, recreation and personal services and manufacturing, and remained poor in retail, manufacturing and construction,” Oster says.
The News of the World phone-hacking scandal continues to reverberate through Australia, with the Government releasing a discussion paper today on enshrining a right to privacy.
“Right now there is no general right to privacy in Australia, and that means there’s no certainty for anyone wanting to sue for an invasion of their privacy,” Home Affairs Minister Brendan O’Connor says.
“The News of the World scandal and other recent mass breaches of privacy, both at home and abroad, have put the spotlight on whether there should be such a right.”
The Australia Law Reform Commission in 2008 recommended introducing privacy laws to Australia.
Meanwhile, News International says it has stopped paying the legal fees of a private investigator who was jailed for his role in the scandal, after Rupert and James Murdoch told a Parliamentary inquiry this week that they were surprised the media giant was still footing the bill.
And British PM David Cameron has expressed regret for hiring former News of the World editor Andy Coulson as his media officer, describing it as a “catastrophic error of judgment.”
“You live and you learn – and believe you me, I have learnt,” he said.
The Australian sharemarket has opened higher this morning despite a weak night in the United States, where investors have remained nervous over the looming deadline for president Barack Obama to organise a deal with Republicans to raise the debt ceiling.
The benchmark S&P/ASX200 index was up 21 points or 0.48% to 4571.5 at 12.00 AEST, while the Australian dollar rose slightly to $US1.07c.
ANZ shares rose 1.08% to $21.43, while Commonwealth Bank shares rose 0.81% to $49.95. AMP shares gained 2.37% to $4.76 as Westpac rose 0.95% to $21.36.
In the United States, the Dow Jones Industrial Average fell 15 points or 0.12% to 12,571.89.
Opposition communications spokesman Malcolm Turnbull has said the Coalition will cease construction on the National Broadband Network if it wins the next election.
“I haven’t read the Telstra contracts, nobody has outside the deal,” Turnbull has told an industry conference. “There will be costs associated with a change of plan, but they would be tiny compared to the savings that would be achieved.”
“A lot of people have said, and they are right, that it would have been cheaper for the Government to buy all of Telstra, keep the customer access network and sell off all of the wireless and retail business,” Mr Turnbull said.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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