2012m03 press release

8/2/2019 2012m03 Press Release

1/10

Embargoed until:

11.30am Tuesday 10 April 2012

Monthly Business Survey March 2012

Confidence and conditions grind higher but with little jobs growth. Forward indicatorsmarginally improve but remain subdued. Multi speed economy still to the fore with

non mining edging up a touch. Domestic forecasts edge lower with unemployment up.Rates view unchanged.

Businesses appeared slightly more confident about near-term activity in March than in February, although adegree of caution still seems to be inhibiting hiring and investment decisions. Positive data out of the US, whichhelped push the Australian dollar lower, and reduced Euro banking concerns probably aided sentiment.

Business conditions continued to edge up in March, albeit marginally. Trading conditions are relatively strongerbut employment remains flat to subdued. This months Survey suggests economic momentum is fundamentallygoing sideways but may just be starting to edge up. Forward indicators of demand, however, remain lacklustre.Credit demand fell back to low levels in March, following a pick up in February (consistent with official RBA data).Overall, the survey implies underlying demand and GDP growth of around 3 -3% in Q1 2012.

Conditions improved sharply in mining and finance/ business/ property in March, but deteriorated reasonablyheavily in wholesale and recreation & personal services. While mining conditions continued to outperform all

other industries, the modest pickup in conditions in February and March appears to have been more broadlybased. Conditions strengthened sharply in WA for a second consecutive month, while Queensland was the onlystate to report weaker conditions.

Labour costs growth was broadly unchanged in March, while purchase costs and product prices growth botheased to fairly subdued levels. Retail prices weakened and appear to have fallen slightly in Q1.

Implications for NAB forecasts (See latest Global and Australian forecasts report also released today):

Global financial and commodity markets have been buoyed by the European Central Banks LTRO operationsthat added substantial liquidity to the banking system, greatly reducing market volatility and risk aversion. Thesoftening that was evident in both business confidence and activity measures through the latter half of last yearseems to have eased. Activity remains weak in the Euro-zone and UK, and several big emerging marketeconomies have experienced a substantial slowing from late 2011. While China may be currently slowing,prospects for 2012 remain favourable as is the US outlook. We have left our global forecasts unchanged 3% this year and 3% in 2013.

Australian near-term outlook revised down marginally, consistent with a continuing sluggish survey, adeteriorating housing sector (a concern that needs to be watched) and surprisingly weak export performance inearly 2012. While we expect the latter to be temporary (Chinese New Year, weather, coal strikes) and there ishope that the economy may be marginally gathering momentum, the reality is that the current soft patch will seea slight deterioration in near-term unemployment prospects we now expect a peak of around 5% mid-yearbefore declining back to around 5% by end 2013. Mining projects expected to bolster activity later in 2012 andbeyond. Our GDP forecasts are now a touch below 3% (was 3%) in 2012 and 3% (unchanged) in 2013.

RBA is signalling a rate cut in May provided inflation is low. We have not changed our rate views and with our Q1core CPI forecast of around % we expect a rate cut. We then expect the RBA to be on hold through 2012.Our core inflation forecasts are unchanged with core (ex carbon tax) 2.2% in 2011/12 and 2.5% in 2012/13.

Key monthly business statistics*

Jan Feb Mar Jan Feb Mar

2012 2012 2012 2012 2012 2012Net balance Net balance

Business confidence 4 1 3 Employment 1 0 1

Business conditions 2 3 4 Forward orders -1 -2 -1

Trading 4 8 8 Stocks 4 4 2

Profitability -1 1 3 Exports -3 -3 0

% change at quarterly rate % change at quarterly rate

Labour costs 0.8 0.9 0.9 Retail prices -0.6 0.3 -0.1

Purchase costs 0.2 0.6 0.3 Per cent

Final products prices -0.1 0.2 0.1 Capacity utilisation rate 81.2 80.6 81.1

* All data seasonally adjusted and subject to revision. Cost and prices data are monthly percentage changes expressed at a quarterly rate. All other data are

net balance indexes, except capacity utilisation, which is an average rate, expressed as a percentage. Fieldwork for this survey was conducted from 26 to30 March 2012, covering around 400 firms across the non-farm business sector.

For more information contact:Alan Oster, Chief Economist(03) 8634 2927 Mobile 0414 444 652

Next release:19 April 2012 (March quarterly)7 May 2012 (April monthly)


2/10

Embargoed until 11:30am Tuesday, 10 April 2012

Analysis

Conditions trend higher

-40

-30

-20

-10

0

10

20

I II III IV I II III IV I II III IV I

2009 2010 2011 2012

Seas onally adjus ted Tren dConds 1990s recn

Business conditions (net balance)

Average of the indexes of trading conditions,profitability and employment.

Business conditions improved in March up1 point to +4 index points. Conditions haveimproved (slightly) in each month of 2012 todate and appear consistent with an economythat is starting to gain momentum albeitmarginally. Business conditions remain a touchabove the long-run average (of +1 for the fullhistory of the survey). The strengthening inconditions in the month largely reflected a tickup in profitability and employment conditions,while trading conditions were unchanged.However, conditions reflect high trading ratherthan employment. Overall, while conditionspoint to an economy embarking upon a modestrecovery, they remain divergent acrossindustries and states. Furthermore, despitegenerally improving in March, forward indicatorsremain fairly lacklustre suggesting that activitywill continue to be soft, at least in the near term.

Business confidence ticked up in March, lifting2 points to +3 index points, partly unwinding thestep down in sentiment recorded in the previousmonth. Confidence remains susceptible togyrations in global markets. The positive boostto sentiment in March appears to have partlystemmed from optimism about the recent movesto stabilise the Greek debt situation, as well asrecent positive economic data out of the US.However, this may have been partly offset byintensifying concerns of a more pronounced

slowing in the emerging economies.Furthermore, the recent depreciation of theAustralian dollar may have provided a smallamount of relief for trade-based industries.Overall, the index remains a little below theseries long-run average (of +6 since 1989).

Confidence ticks up but still soft

-40

-30

-20

-10

0

10

20

I II III IV I II III IV I II III IV I2009 2010 2011 2012

Seas onally adjus ted Tren dConf 1990s recn

Business confidence (net bal., s.a.)

Excluding normal seasonal changes, how do youexpect the business conditions facing your industry inthe next month to change?

Business conditions by industry. Conditions improved across most industries in the month,with the exception of wholesale and recreation & personal, where they deterioratedsignificantly. Retail, conditions were unchanged at very subdued levels. The sharpestimprovements in conditions in the month were in mining in part reflect the strengthening iniron ore prices and finance/ property/ business (reflecting global developments). Businessconditions were strongest in mining (+36) and transport & utilities (+26). They were weakest(and contractionary) in retail (-15), construction (-6), manufacturing (-4) and wholesale (-3).

The NAB survey has highlighted the strengthin mining relative to other sectors for anumber of years. Since the start of 2010,mining business conditions have averaged anet balance of +24 index points, compared to+3 points for overall conditions. While themining sector is under-represented in thesurvey, the strength of conditions does affectthe overall index. The chart shows that therise in total business conditions in Januaryreflected relative strength in mining non-mining sector conditions in aggregate actually

softened. Since then, however, the modestpickup in conditions in February and Marchappears to be more broadly based.

Non-mining conditions on the rise

Business Conditions

-5

0

5

10

2010 2011 2012

Net

bal.

-5

0

5

10

Net

bal.

Total

Non-mining

Source: NAB

2


3/10


Analysis (cont.)

Business conditions by state. Conditions strengthened considerably in WA in March,consolidating a sharp pick up in the previous month; the improvement in WA conditions inMarch coincided with a surge in mining conditions. Conditions also improved solidly in Victoria,while they strengthened marginally in NSW, SA and Tasmania. Queensland was the only stateto report deteriorating conditions in the month. In levels terms, conditions in the mainland

states were strongest in WA (+21), followed by NSW (+5) and Victoria (+4), while they wereweakest in Queensland (-4).

Business confidence by industry. Business confidence improved across most industries inthe month, after weakening in February (with the exception of mining). Confidence picked upmost significantly in mining, construction and finance/ business/ property, while it deterioratedin recreation & personal services, transport & utilities and manufacturing. In levels terms,confidence was highest in mining, construction (both +10) and finance/ property/ business (+5),while it was lowest in recreation & personal services (-1) and manufacturing (zero). Thestrength in construction confidence probably reflects mining and infrastructure developmentsrather than residential construction where activity has been deteriorating.

Business confidence by state. Business confidence improved solidly in Tasmania (on asmall sample) and Queensland. Confidence also improved in Victoria and was marginallybetter in NSW. In contrast, confidence deteriorated heavily in SA, after improving in theprevious month, while it also softened in WA. In levels terms, confidence of the mainland stateswas highest in WA (+9), Queensland (+5) and NSW (+4), while it was lowest in SA (-6) andVictoria (-2).

Variation in business conditions acrosssectors has become pronounced since late2009. This can be observed by comparingtrend conditions of the strongest performingsectors (mining, transport & utilities,recreation & personal services and finance/business/ property) with trend conditions ofthe weakest performing sectors (retail,manufacturing, construction and wholesale).

The persistent divergence in industryconditions indicates that the Australianeconomy is undergoing a structuraltransformation towards mining and service-based industries, and away from traditionalmanufacturing and discretionary retailing.

Economy remaking itself

-30

-20

-10

0

10

20

2000 2003 2006 2009 2012 2002 2005 2008 2011

Net

bal.

-30

-20

-10

0

10

20

Net

bal.

Weak**

Strong*

Business conditions3-month moving average; seasonally adjusted

* Strong industries include mining, transport & utilities, recreation & personal

services and finance/business/property

** Weak industries include retail, manufacturing, construction and wholesale

Gap between weak &

strong industry conditions

The forward orders index picked up marginally in March, rising from -2 to -1 index points. Atthe industry level, there were widely disparate shifts in orders; manufacturing orders improvedvery sharply, possibly reflecting the depreciation of the Australian dollar during the month,while they deteriorated heavily in wholesale, transport & utilities and retail. In March, orderswere strongest in mining (+22) followed by manufacturing (+10), while they were againweakest in retail (-15) and construction (-7). Capacity utilisation, which has hovered in arange of 80-82% over the past two years, rose by 0.5 ppts to 81.1% in March. Mining,construction and wholesale all contributed solidly to the rise, while utilised capacity declinedmodestly in transport & utilities. Overall, capacity utilisation was highest in mining (88.7%) andwholesale (84.8%), and lowest in manufacturing (77.2%). Capital expenditure improvedmarginally in March (up 2 to +6 points), but remains below recent levels, suggesting thatbusiness investment may have softened in early 2012. Capital expenditure was highest inmining (+36) and transport & utilities (+33), and lowest in manufacturing (-5) and retail (-3).

3


4/10


Analysis (cont.)

Demand growth to tick down

-4

-2

0

2

4

6

8

10

02 03 04 05 06 07 08 09 10 11 12

Domest ic demand Predict ion from orders

Forward orders (change & level) as an indicator of

domestic demand (6-monthly annualised)

Forward orders implied softer 6-monthlyannualised demand growth for December quarter2011 than the 4.7% outcome in the Decemberquarter national accounts. Based on averagemonthly forward orders for the March quarter, the

survey implies 6-monthly annualised demandgrowth will ease to around 3 - 3% in the Marchquarter.

In contrast, business conditions imply that 6-monthly annualised GDP growth was strongerthan the 2.5% recorded in the December quarter.Based on average monthly business conditionsfor the March quarter, the implied 6-monthlyannualised GDP growth (ex mining) would rise beabout 3 - 3% (6 monthly annualised) in theMarch quarter, around trend.

Elsewhere in the survey, cash flow (notseasonally adjusted) was strongest in transport &utilities and finance/ business/ property andweakest in construction and retail.

Labour costs growth (a wages bill measure) wasunchanged at a reasonably benign 0.9%(quarterly rate) in March. The survey suggeststhat wage costs pressures are reasonably wellcontained and are unlikely to be a cause ofconcern for policy makers. In March, labour costsgrowth (at a quarterly rate) was strongest intransport & utilities (1.7%), construction (1.4%)and mining (1.3%), and was softest inmanufacturing (0.4%) and retail (0.7%).

GDP (ex coal) growth aroundtrend

-2

0

2

4

6

8

02 03 04 05 06 07 08 09 10 11 12

GDP Predi ct ion from bus conds

Business conditions (change & level) as an indicator of

GDP (6-monthly annualised)

Price inflation across all industries softenedmarginally in March and remained very subduedat just 0.1% (at a quarterly rate). The direction ofprice changes was mixed across industries;inflationary pressures appear to have risen inconstruction and finance/ property/ business,while they appear to have softened in mining,recreation & personal services and retail. Overall,price pressures were strongest in finance/property/ business and transport & utilities (both0.4%), while they were softest in manufacturing(-0.2%). Retail prices remain very subdued and

appear to have fallen in Q1 2012 consistent withcore inflation readings around %.

Overall purchase cost pressures eased in March,with growth slowing to 0.3% (at a quarterly rate),down from 0.6% in the previous month. Purchasecosts pressures increased solidly in transport &utilities consistent with the recent rise in petrolprices while they softened most notably in retailand manufacturing. Purchase costs growth wasstrongest in transport & utilities (1.5%),construction (1.0%) and finance/ property/business (0.9%), while it was weakest in

manufacturing (-0.5%) and wholesale (-0.4%).

Price & cost pressures remainsoft overall

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5


2009 2010 2011 2012

Labour Product price Retai l price

Costs & prices (% change at a quarterly rate)

Based on respondent estimates of changes in labourcosts and product. Retail prices are based on retailsector product price estimates.

4


5/10


Current business conditions

Trading strongest

But profitability improving

The business conditions index increased by 1 point to+4 index points in March, consolidating the risesrecorded over 2012 to date. The trend conditionsindex also rose slightly in the month and remains alittle above the long-run average level of +1 point.

Trading, profitability and employment

The improvement in business conditions reported inthe March survey reflected increases in profitabilityand employment conditions, while trading conditionsremained unchanged at a relatively elevated level.

Trading conditions improved very solidly in mining(up 16 to +28 points), more than unwinding a fall inthe previous month, followed by finance/ businessproperty (up 5). In contrast, trading conditionsdeteriorated very heavily in wholesale (down 18 to+1 point) and recreation & personal services (down 11

to +15 points). In trend terms, trading conditions werestrongest in mining (+22), recreation & personalservices and transport & utilities (both +21), whileconditions were again weakest in retail (-17).

-40

-30

-20

-10

0

10

20


2009 2010 2011 2012

Trading Profitability EmploymentConds 1990s recn

All components of business conditions (net bal., s.a.)

Net balance of respondents who regard last monthstrading / profitability / employment performance asgood.

Employment conditions improved considerably in mining (up 23 to +52 points) highlighting theintensity in mining activity while they deteriorated moderately in wholesale (down 5 to -5 points)and transport & utilities (down 2). Trend employment conditions were strongest in mining (+34) andtransport & utilities (+12), while they were softest in manufacturing (-9) and construction (-8).

Profitability improved across all industries in the month, with the exception of recreation &personal services, where it deteriorated solidly, and wholesale, where it was marginally softer. The

most notably improvements in profitability were in mining (up 17 to +21 points) and finance/property/ business (up 11). In trend terms, profitability was strongest in transport & utilities (+18)and recreation & personal services (+16), while it was weakest in retail (-17), construction andmanufacturing (both -14).

Business conditions components (net balance)

-30

-20

-10

0

10

20

I II III IV I II III IV I

2010 2011 2012

Seasonally adjusted Trend

Trading performance

-30

-20

-10

0

10

20


2010 2011 2012


Profitability

-30

-20

-10

0

10

20


2010 2011 2012


Employment

Net balance of respondents reporting trading performance / profitability / employment as good or very good (rather thanpoor or very poor).

5


6/10


Current business conditions (cont.)

Forward orders Soft new demand

The forward orders index an indicator ofdomestic demand strengthened marginally inMarch. Seasonally adjusted orders rose by 1 point

to -1 index point in line with its long-run averagelevel. Trend orders also improved marginally to-1 index point.

In March, forward orders improved mostsignificantly in manufacturing (up 19 to +11 points)and mining (up 9), while they deteriorated heavilyin wholesale and transport & utilities (both down8). Orders were strongest in mining (+22) andmanufacturing (+11), while they were againweakest in retail (-15) and construction (-7), whichis consistent with the weakness in activity in theseindustries.

-40

-30

-20

-10

0

10

20


2009 2010 2011 2012

Seas onally adjus ted TrendOrders 1990s recn

Forward orders (net balance)

Net balance of respondents with more orders fromcustomers last month.

Capacity utilisation Utilised capacity increases

In March, capacity utilisation ticked up to 81.1%,from 80.6% in February, to be modestly above theseries long-run average level (of 80.4% since1989). Capacity utilisation picked up solidly inmining (up 2.7 ppts to 88.7%) and construction(up 2.1 ppts to 79.5%), while it fell significantly intransport & utilities (down 1.3 ppts to 84%). Miningcontinued to utilise the most capacity in the month(88.7%); the level of capacity utilisation was alsohigh in wholesale (84.8%). In contrast, utilisedcapacity was lowest in manufacturing (77.2%),retail (79.2%) and construction (79.5%).

75

76

77

78

79

80

81

82

83

84


2009 2010 2011 2012

S eas onally adjus ted TrendCapU 1990s recn

Capacity utilisation (per cent)

Full capacity is the maximum desirable level ofoutput using existing capital equipment.

Stocks Restocking takes a pause

The stocks index softened to +2 index points in

March, down from +4 points in February, althoughremaining above its long-run average (of +1 pointsince 1989).

Movements in the stocks industry were againdivergent in March. The stocks index fell heavily inmining (down 18 to -6 points), wholesale (down14; unwinding a particularly sharp improvement inthe previous month) and retail (down 13). On theother hand, stocks rose solidly in construction (up16 to -3 points) and transport & utilities (up 13). Intrend terms, the stocks index was highest inwholesale (+12) and transport & utilities (+9),while it was lowest (and negative) in construction

(-9) and recreation & personal services (-1).

-20

-15

-10

-5

0

5

10


2009 2010 2011 2012

Seas onally adjus ted Trend

Stocks (net balance)

Net balance of respondents with an increase instocks last month.

6


7/10


Current business conditions (cont.)

Capital expenditure Capex picks up again

Capital expenditure picked up moderately inMarch (up 2 to +6 points), though it remained wellbelow its recent peak of +11 (reported in

November last year). Capex continued to risesolidly in mining (up 16), followed by construction,wholesale (both up 8) and finance/ property/business (up 7), while it fell to subdued levels inmanufacturing (down 9) and retail (down 6). Inlevels terms, the seasonally adjusted capitalexpenditure index was highest in mining (+36) andtransport & utilities (+33), and lowest inmanufacturing (-5) and retail (-3).

Net balance of respondents with an increase in capitalexpenditure last month.

0

2

4

6

8

10

12


2010 2011 2012


Capital expenditure (net balance)

Exports Exports improve solidly

The exports index, which represents exportconditions for the economy as a whole, rosesolidly, from -3 to zero index points in March itshighest level since July 2011.

The pick up in export activity was broad-basedacross all industries, with the exception ofrecreation & personal services, where it wasunchanged. The most significant strengthening inexports occurred in manufacturing (up 15 to+7 points), possibly helped by the softening in theAustralian dollar over March.

The exporters sales index, which representsexport conditions for exporting industries,increased very sharply from -11 to +3 indexpoints.

Net balance of respondents with an increase in export saleslast month.

-10

-8

-6

-4

-2

0

2


2009 2010 2011 2012

Seasonal ly adjus ted Trend

Exports (net balance)

Credit availability Demand for credit diminishes

Firms reported that borrowingconditions were slightly easier in

March, with the net index (easierminus harder) falling from -7 to-5 index points in the month. Thismonths outcome reflected a fall in theproportion of respondents finding itmore difficult to obtain finance, onlypartly offset by a fall in the proportionof respondents finding finance easierto obtain. The proportion ofbusinesses requiring no financeincreased sharply, from 50% to 65%,implying significantly less demand forcredit.

In terms of the borrowings required for yourbusiness in the last month, has it been

0

20

40

60

80

100

IV I II III IV I

2010 2011 2012

M ore di ffi cult Unc hanged Eas ier No borrowi ng required

Borrowing conditions (% of firms)

7


8/10


Industry sectors

Business confidence Confidence up solidly in mining & construction;recreation & personal sentiment falls

Business confidence levels improved across most industries in March, with the exception ofrecreation & personal services (down 6), transport & utilities (down 3) and manufacturing

(down 1). Confidence picked up strongly in mining (up 11), construction (up 9) and finance/business/ property. While business confidence in the month improved marginally, trendconfidence was lower for all industries, with the exception of finance/ business/ property.Seasonally adjusted confidence was strongest in mining, construction (both +10) andfinance/ business/ property (+5), while it was softest in recreation & personal services (-1)and manufacturing (zero). Trend confidence was strongest in construction (+5) and softest inmining (zero).

Business confidence by industry (net balance)

3-month moving average

-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Mining Manuf Constn

-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Retail Wsale Transp

-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Fin, bus, prop Rec , pers

Business conditions Mining strongest; retail still the weakestBusiness conditions generally strengthened across most industries in the month, with theexception of wholesale and recreation & personal services, where it deteriorated markedly.The most significant improvement in conditions was in mining (up 19 to +36 points), followedby finance/ business/ property (up 9) and transport & utilities (up 5). In seasonally adjustedterms, conditions were strongest in mining (+36) and transport & utilities (+26). Conditionswere weakest (for the second consecutive month) in retail (-15), followed by construction(-6), manufacturing (-4) and wholesale (-3). Trend conditions were most favourable in mining(+25), while they were most subdued in retail (-13).

Business conditions by industry (net balance)


-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Mining Manuf Constn

-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Retail W sale Transp

-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Fin, bus, prop Rec, pers

8


9/10


States

Business confidence Confidence still strongest in WA; weakest inVictoria and SA

Of the mainland states, business confidence improved most significantly in Queensland (up5 to +5 points); the change in government occurred after the survey was conducted but was

wildly anticipated. Confidence also strengthened in Victoria (up 3) and NSW (up 1), while itdeteriorated sharply in SA (down 9 to -6 points), where it is now weakest, and WA (down 2).Despite a slight dip in the month, trend confidence remained most favourable in WA (+11),followed by NSW (+4), while it was poorest in Victoria (-3) and SA (-1). Trend confidenceimproved in Tasmania (up 6 to +7 points), although care should be taken when interpretingthese data due to small sample size.

Business confidence by state (net balance)


-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Australia NSW VIC

-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Australia QLD WA

-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Australia SA TAS

Business conditions Conditions strengthen in all states

except Queensland and TassieBusiness conditions improved across all mainland states in March, with the exception ofQueensland. Conditions in WA surged to their highest level since July 2008 (up 8 to +21),while they also strengthened notably in Victoria (up 5). In trend terms, conditions in themainland states were by far the strongest in WA (+13), while they were slightly expansionaryin NSW (+3) and Victoria (+2). In contrast, conditions were softest in Queensland (-1) and SA(zero). Trend conditions deteriorated heavily in Tasmania (down 10 to -25), although careshould be taken when interpreting these data.

Business conditions by state (net balance)


-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Australia NSW VIC

-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Australia QLD WA

-40

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Australia SA TAS

9


10/10

Macroeconomic, Industry & Markets ResearchAustralia

Alan Oster Group Chief Economist +(61 3) 8634 2927

Jacqui Brand Personal Assistant +(61 3) 8634 2181

Rob Brooker Head of Australian Economics & Commodities +(61 3) 8634 1663

Alexandra Knight Economist Australia +(61 3) 9208 8035Michael Creed Economist Agribusiness +(61 3) 8634 3470

Dean Pearson Head of Industry Analysis +(61 3) 8634 2331

Gerard Burg Economist Industry Analysis +(61 3) 8634 2788

Robert De Iure Economist Property +(61 3) 8634 4611

Brien McDonald Economist Industry Analysis & Risk Metrics +(61 3) 8634 3837

Tom Taylor Head of International Economics +(61 3) 8634 1883

John Sharma Economist Sovereign Risk +(61 3) 8634 4514

Tony Kelly Economist International +(61 3) 9208 5049James Glenn Economist Asia +(61 3) 9208 8129

Global Markets Research - Wholesale Banking

Peter Jolly Head of Markets Research +(61 2) 9237 1406

Robert Henderson Chief Economist Markets - Australia +(61 2) 9237 1836

Spiros Papadopoulos Senior Economist Markets +(61 3) 8641 0978David de Garis Senior Economist Markets +(61 3) 8641 3045New Zealand

Tony Alexander Chief Economist BNZ +(64 4)474 6744Stephen Toplis Head of Research, NZ +(64 4) 474 6905Craig Ebert Senior Economist, NZ +(64 4) 474 6799Doug Steel Markets Economist, NZ +(64 4) 474 6923

London

Nick Parsons Head of Research, UK/Europe & Global Head of FX Strategy +(44 20) 7710 2993

Tom Vosa Head of Market Economics UK/Europe +(44 20) 7710 1573Gavin Friend Markets Strategist UK/Europe +(44 20) 7710 2155

Foreign Exchange Fixed Interest/Derivatives

Sydney +800 9295 1100 +(61 2) 9295 1166

Melbourne +800 842 3301 +(61 3) 9277 3321

Wellington +800 64 642 222 +800 64 644 464

London +800 747 4615 +(44 20) 7796 4761

New York +1 800 125 602 +1877 377 5480

Singapore +(65) 338 0019 +(65) 338 1789

DISCLAIMER: [While care has been taken in preparing this material,] National Australia Bank Limited (ABN 12 004 044 937) does not warrant or represent that the information,recommendations, opinions or conclusions contained in this document (Information) are accurate, reliable, complete or current. The Information has been prepared for dissemination toprofessional investors for information purposes only and any statements as to past performance do not represent future performance. The Information does not purport to contain all mattersrelevant to any particular investment or financial instrument and all statements as to future matters are not guaranteed to be accurate. In all cases, anyone proposing to rely on or use theInformation should independently verify and check the accuracy, completeness, reliability and suitability of the Information and should obtain independent and specific advice from appropriateprofessionals or experts.

To the extent permissible by l aw, the National shall not be liable for any errors, omissions, defects or misrepresentations in the Information or for any loss or damage suffered by persons whouse or rely on such Information (including by reasons of negligence, negligent misstatement or otherwise). If any law prohibits the exclusion of such liability, the National limits its liability tothe re-supply of the Information, provided that such limitation is permitted by law and is fair and reasonable. The National, its affiliates and employees may hold a position or act as a pricemaker in the financial instruments of any issuer discussed within t his document or act as an underwriter, placement agent, adviser or lender to such issuer.

UK Disclaimer: So far as the law and the FSA Rules allow, National Australia Bank Limited (the Bank) disclaims any warranty or representation as to the accuracy or reliability of theinformation and statements in this document. The Bank will not be liable (whether in negligence or otherwise) for any loss or damage suffered from relying on this document. This documentdoes not purport to contain all relevant information. Recipients should not rely on its contents but should make their own assessment and seek professional advice relevant to theircircumstances. The Bank may have proprietary positions in the products described in this document. This document is for information purposes only, is not intended as an offer or solicitationnor is it the intention of the Bank to create legal relations on the basis of the information contained in it. No part of this document may be reproduced without the prior permission of the Bank.This document is intended for Investment Professionals (as such t erm is defined in The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001) and should not be passedto any other person who would be defined as a private customer by the rules of the Financial Services Authority (FSA) in the UK or to any person who may not have experience of suchmatters. Issued by National Australia Bank Limited A.C.N. 004 044 937, 88 Wood Street, London EC2V 7QQ. Registered in England BR1924. Head Office: 500 Bourke Street, Melbourne,Victoria. Incorporated with limited liability in the state of Victoria, Australia. Regulated by the FSA in the UK.

U.S DISCLAIMER: This information has been prepared by National Australia Bank Limited or one of its affiliates or subsidiaries ("NAB"). If it is distributed in the United States, suchdistribution is by nabSecurities, LLC which accepts responsibility for its contents. Any U.S. person receiving this information wishes further information or desires to effect transactions in anysecurities described herein should call or write to nabSecurities, LLC, 28th Floor, 245 Park Avenue, New York, NY 10167 (or call (877) 377-5480). The information contained herein has beenobtained from, and any opinions herein are based upon, sources believed to be reliable and no guarantees, representations or warranties are made as to its accuracy, completeness orsuitability for any purpose. Any opinions or estimates expressed in this information is our current opinion as of the date of this report and is subject to change without notice. The principals ofnabSecurities, LLC or NAB may have a long or short position or may transact in the securities referred to herein or hold or transact derivative instruments, including options, warrants or rightswith securities, or may act as a market maker in the securities discussed herein and may sell such securities to or buy from customers on a principal basis. This material is not intended as anoffer or solicitation for the purchase or sale of the securities described herein or for any other action. It is intended for the information of clients only and is not for publication in the press orelsewhere.

2012m03 press release

Documents