Australia’s Business Conditions Improve, AUD Unaffected

Business conditions across Australia are on the uptick as the nation eases COVID-19 restrictions and reopens its economy, especially across

Written by: Aiswarya Gopan • Tuesday, December 14, 2021 • 1 min read

• Last updated: Tuesday, December 14, 2021

Australia's Business Conditions Improve, AUD Unaffected

Business conditions across Australia are on the uptick as the nation eases COVID-19 restrictions and reopens its economy, especially across Sydney and Melbourne. The latest survey from the National Australia Bank (NAB) reveals an improvement in its business conditions’ index from 10 in October to 12 in November, well above average levels.

The surge in the headline index was powered by a strong improvement in employment, with its sub-index rising from 6 in October to a high of 11. The index for sales picked up from 15 to 16 while profitability held steady at 8 through the month of November.

Capacity utilization rates of businesses across Australia also rose sharply to 83.2%, indicating a strong possibility of higher investments to increase output levels going forward. On another positive note, forward orders index also held steady at a strong level of 14.

According to NAB chief economist, Alan Oster, “Overall, these results indicate a strong recovery is underway. There is still scope for things to improve further in coming months, particularly in recreation & personal services which was still in negative territory in November despite many restrictions easing in the month.”

Impact on the Australian Dollar

The positive economic data failed to drive any positive price action in the AUD, as traders pile into the US dollar ahead of the upcoming Fed meeting this week. At the time of writing, AUD/USD is trading around $0.709.

AUD/USD

The risk sensitive Australian dollar has also taken a beating over reports of the first death due to the Omicron variant in the UK. This has once again raised some concerns about the latest variant of COVID-19 and how it could potentially derail economic recovery globally.

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ABOUT THE AUTHOR See More

Aiswarya Gopan

Financial Writer & Editor - Asia & Europe Desk

Aiswarya Gopan is a financial journalist, editor, and content strategist with more than 19 years of experience across financial markets, fintech, blockchain, and technology. She has worked with leading cryptocurrency exchanges, including BingX and KuCoin, driving content strategy, market research, and editorial initiatives covering digital assets, DeFi, Web3, and global financial markets. Drawing on a background in cybersecurity, technology journalism, and market research, Aiswarya specializes in translating complex financial and blockchain developments into clear, timely insights. At FX Leaders, she covers cryptocurrency, stocks, forex, and macroeconomic developments across the Asian and European trading sessions.