Property sector profitability and confidence improves, but construction falls further: NAB

The combined property-finance-business sector was the only industry to record an improvement in both profitability and confidence over January, according to the NAB monthly business survey.

On the back of a small overall rise in both business conditions (up two points) and business confidence (up one point) in January, profitability rose “marginally” in the finance-property-business sector as well as in the recreation and personal services industry.

The proportion of businesses not requiring finance increased from 64% to 67% in January, the highest figure since the survey was first asked.

Source: NAB

Confidence also strengthened in the property-finance-business sector, with the industry index rising four points to +3 on this measure.

In line with historically weak building approvals and a challenging economic environment, sentiment in the construction sector deteriorated over January.

NAB recorded a nine-point drop in construction industry confidence (alongside a similar fall in the wholesale sector), while there was a heavy 30-point fall in construction sector profitability.

The construction industry found itself on the wrong side of most measures in the survey, including forward orders and capital expenditure.

Construction is also the second most under-used industry in the economy alongside retail, operating at 79.8%, ahead of manufacturing (76.1%). Capacity utilisation is highest in mining (87.1%), according to the survey.

Summing up the January index, NAB said there were “heavy falls in conditions in wholesale, transport and utilities, and construction, broadly offset by improvements in mining, manufacturing and recreation & personal services”.

On a state-by-state basis, business conditions deteriorated sharply in SA and Tasmania, but strengthened modestly in Victoria and Queensland.








Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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