NAB survey: SA business conditions lead nation

ONE of Australia’s four major banks feels business conditions in South Australia will lead the nation – on the back of a “mini mining boom” and resilient local housing market.

A “mini mining boom” is supporting renewed confidence in the South Australian economy.

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BUSINESS conditions in South Australia lead the nation, according to NAB’s latest business survey, on the back of a “mini mining boom” and resilient local housing market.

The bank’s monthly business survey reveals the state’s business conditions index held firm at 19 points in June, ahead of every other state and a national index of 15 points.

NAB chief economist Alan Oster said the South Australian economy had held up well in recent months as other states faced falling house prices and a challenging retail environment.

“We tend to look at things in confidence terms and South Australia is about as confident as anyone at the moment,” he said.

“South Australia has been quite strong for a while but so many of the other states have weakened.

“I think property’s having a big impact - property feeds into people’s willingness to spend.

“If you think your house price is going down, you’re less likely to spend your discretionary income in shops, and I think that might be coming into play in South Australia.”

OZ Minerals’ Debbie Alexander with a core sample at the Carrapateena mine site, which recently gained approval for the copper-gold project to go ahead near Port Augusta.

Conditions in the manufacturing, construction, wholesale and finance, business and property services sectors improved in June, according to NAB, while retail remains weakest.

Meanwhile, rising commodity prices and renewed export demand have stimulated a revival of the country’s mining sector.

“In trend terms, conditions in the mining sector remain highest even as the mining boom continues to wind down, while the retail sector remains clearly the weakest,” Mr Oster said.

“The construction sector is also reporting robust conditions reflecting the large pipeline of infrastructure work and significant pipeline of housing construction underway.”

According to NAB, South Australian businesses are also among the most confident in the country, trailing Queensland and Western Australia but ahead of Victoria, NSW and Tasmania.

The state’s confidence index rose slightly to 10 points in June, while the national index edged down one point to six points.