2020.03.1004:16:00UTC+00Australia Business Confidence Weakens In February

Australia business confidence and conditions weakened in February, although it appears too early to fully quantify the effect of the Coronavirus, survey data from the National Australia Bank showed on Tuesday.

The business conditions index fell two points to zero in February, led by a decline in profitability and small decline in trading conditions.

At the same time, the business confidence index dropped to -4, signaling that businesses see further deterioration in conditions in the short term.

"Both conditions and confidence fell in the month, but not by as much as we had feared," Alan Oster, NAB group chief economist, said. That said, both continue to track below average and with forward orders weakening its likely we could see further deterioration.

With leading indicators softer, it is unlikely to see a material improvement in conditions in the near term, he said.

The survey showed that around 50 percent of firms reported no impact to date from the outbreak of coronavirus.

However, it is very possible this number will rise as the spread of the virus continues - this would most likely result in a further deterioration in confidence and eventually reported business conditions, said Oster.