As opposed to some earlier reports on business confidence and conditions this year from the National Australia Bank, the November report out yesterday, is pretty conventional.

It fact it was a repeat of comments from the Reserve Bank and Federal Treasury in the past month, although the NAB says its forecasts are a bit more optimistic than both those groups.

And as the national accounts for the September quarter last week showed (and also comments from the RBA), we can thank the mining and resources sector for the conventional feel to trading conditions and business confidence, as well as continued solid activity from consumers.

The NAB said business conditions edged higher in November, after softening a little in October "and are consistent with an economy growing at around trend."

And business confidence was unchanged, but remained positive at +2 index points. But that was still under its long term average, according to the NAB.

"With the exception of trading conditions, all of the survey indicators improved in the month, with increases in forward orders, stocks, employment and capacity utilisation suggestive of improved economic activity.

The Bank said the survey over the current (December) quarter to date are "broadly consistent with underlying demand growth of around 3.5-3.75% and GDP (ex. coal) growth of around 3.25-3.5% in the December quarter (at a 6-monthly annualised rate).

The survey revealed that business conditions were mixed by industry.

"The services sectors (outside finance) all reported better activity in the month. Mining, transport & utilities and retail conditions were also noticeably stronger, "the NAB said.

Mining and services posting growth to +24 and +12 index points respectively, while manufacturing and construction was notably weaker, at -21 and -12.

Transport and utilities also posted growth, reaching an index reading of +10.

"In contrast, conditions deteriorated heavily in construction in November, while manufacturing conditions also deteriorated in the month; conditions were worryingly weak in both sectors.

"Labour cost growth ticked up in November, consistent with an improvement in employment conditions in the month.

"Final product prices rose in the month but retail prices remained broadly flat, the NAB added.

"Given that we have seen some slowing in global activity data, especially in Europe, the up tick in conditions in the month is perhaps more favourable than might have been expected," the survey said.

"However, business conditions were by no means equal across sectors.

"The pick up in business conditions in the month reflected improvements in employment conditions and profitability, which were partly offset by a deterioration in trading conditions."

NAB said the survey results would see a rise in domestic growth forecasts, which predict the domestic economy to grow at a pace of 2.1% this year before jumping to 4% next year.

"Our GDP forecasts have been strengthened to reflect stronger consumption and mining investment growth," the survey said.

"We are generally more bullish on near-term growth than the Commonwealth Treasury and RBA's (Reserve Bank of Australia) latest forecasts."


Meanwhile it was a mixed couple of reports from the ABS yesterday on home building and personal finance which continues the trend of good news and bad for the economy.

Personal finance commitments rose sharply in October, but housing starts fell 6.8% in the third quarter.

Now, that's not 'new news', more confirmation that the new home sector is still declining and governments (local, state and Federal) don't really care.

And seeing the report on housing starts in October was glum we can expect another poor quarterly report in three months time.

Many people in the industry (and no doubt government) are hoping the two rate cuts will spark an upturn in demand, but they won't do much because the industry's problems go deeper and involve questions about the expense of housing, not the cost of finance, and the adequate supply of new home building sites, as well as good public transport.

The ABS said dwelling starts fell to 35,672 units in the September quarter, seasonally adjusted, from an upwardly revised 38,290 in the June quarter (37,820 originally reported).

It was the fourth decline in five quarters, and the biggest quarterly drop in dwelling starts for a year.

In the year to September 2011, total dwelling commencements dropped 11.5%, seasonally adjusted, the ABS said.

"We've seen a pick-up a housing finance but haven't really seen that translate into dwelling approvals or housing starts," she said.

Home loan approvals rose 0.7% in October in figures released by the ABS on Monday - the sixth straight increase in the measure.

But those new loans obviously aren't for new homes because housing starts have been falling for the past year or more.

And another report from the ABS report showed total personal finance commitments rose 5.2% in October to $7,317 billion, from $6.956 billion in September.

The ABS said revolving credit commitments rose 11.3% and fixed lending commitments rose 0.4% in the month.

Total commercial finance in October rose 16.5% to $36.310 billion, seasonally adjusted, from $31.158 billion in September.

The rebound in this area was notable given the 9.5% fall in September from August.

The ABS said revolving credit commitments rose 34.8%, after a 15.1% fall in the previous month. Fixed lending commitments rose 8.0%, after a 6.6% fall in the previous month

Lease finance was down 2.4% in October to $417 million, compared with $427 million the month before.

Housing finance for owner occupation fell 1.2% to $14.377 billion in October, from $14.546 billion in September.

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