The NAB Business Conditions survey released in July confirmed what most already knew, that business conditions remain tough in Australia. While the economy has not entered recession officially, "it just feels like it" for most of the country.
The Business Conditions survey shows that we have not seen this sort of weakness since 2009 which was during the depths of the GFC. Business confidence is best described as "shot" and will probably not improve until the result of the Federal election is known.
For this reason we remain very selective about where we would recommend to invest in Australia. We are tending to favour businesses that have overseas earnings rather than those solely based domestically.
This weakness in business conditions could also convince the RBA to further cut interest rates. NAB themselves have suggested that the RBA could move again in August following the issue of this survey. This could further weaken the $AUD.
This material has been provided for general information purposes and must not be construed as investment advice. This material has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Investors should consider obtaining professional investment advice tailored to their specific circumstances prior to making any investment decisions and should read the relevant Product Disclosure Statement.