Whether you are buying or selling, a residence or a business, recent statistics have brought good news.
Business confidence lifted again in the month of June – the highest level since September 2013. Confidence is now positive in all industries, except mining, and business conditions improved even more, in June – the highest level since last October.
Global concerns appear to have been shrugged off as the business environment continued to improve into June. While there were some unexpected variations across industries, business confidence lifted again from +8 to +10 index points in the month – the highest level since September 2013. Confidence is now positive in all industries except mining, which is currently zero.
Business conditions improved even more, lifting 5 points to +11 index points in June – the highest level since last October. Improvements in both confidence and conditions over recent months are starting to suggest a more convincing turnaround in the non-mining sectors is underway.
The more sluggish rise of the employment rate remains a concern but trading and profits have been strong for several months.
Australian economy forecasts for GDP are unchanged. Domestic demand is still weak, but near term data have strengthened. A better starting point means unemployment will peak lower than previously expected (around 6¼%), but will remain elevated.
Further cuts from the RBA seem unlikely, however. While recent global turmoil (especially in Chinese equity markets) present some downside risk, the strength of local data suggests upside risks. But it's unlikely interest rates will start an upward trend until late 2016.