Businesses plan to invest and hire more: NAB survey


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Companies expect business conditions to continue improving and are planning to lift investment and hire more people over the coming year.

NAB's quarterly business survey found conditions were slightly higher in the final three months of 2017.

Chart showing capex plans for next the 12 months.

Confidence remained more subdued but NAB said a pick-up in its monthly survey for December indicates sentiment is likely improving.

Expectations for conditions over the next 12 months hit their highest level since 2010, feeding through to stronger intentions for investment and hiring.

Plans for capital expenditure rose in most sectors, particularly manufacturing and construction, but were lower amongst retailers and finance firms.

Conditions in the retail sector improved slightly in the quarter but continued to lag compared to other sectors.

"The health of the retail sector remains quite critical to the economy given that consumption makes up the lion's share of the economy," said NAB's chief economist Alan Oster.

"If subdued business conditions are telling us something about the mindset of the consumer, then faster and more sustainable growth will be more of a challenge if things don't improve."

Wages the biggest worry for businesses: NAB

Wage costs were a major factor in how businesses were feeling, and the top concern for those with deteriorating confidence.

"It is unclear whether this means we are likely to see a pick-up in wages from here, or conversely, even more restraint as firms attempt to preserve margins," Mr Oster said.

The survey showed firms were having increasing difficulty finding workers with the skills to match their needs, which NAB economists said was "an encouraging sign" for wages growth going forward.

NAB is forecasting the unemployment rate to fall to around 5.25 per cent by the end of the year.

Chart comparing employment expectations currently, over next three months and over next twelve months.

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