The Australian economy is showing unrelenting strength, with forward orders and capital expenditure accelerating in trend terms through the September quarter, according to a survey of business conditions by the National Australia Bank (NAB) released today.
NAB's business conditions index for September declined marginally in original terms by 2 points to +16 index points. The small retreat follows a rise of 10 points in August.
The data are consistent with growth in the non-farm economy of close to 4.75% or more, NAB said.
Central bank policy makers are now likely to see risks in maintaining an expansionary stance in its monetary policy, with a strong chance that interest rates will be raised soon. NAB has brought forward its forecast for the likely timing of an interest rate increase from the first quarter of 2004 to December.
