Stephen Koukoulas

You're quite right.

And this is one of the early readings we've had on a reaction to the petrol price shock because we haven't had any hard data because it only began in early March.

And here we are in the middle of April.

So we haven't had that data flow coming through.

But the NAB survey on business confidence, the Westpac survey on consumer sentiment were incorporating data.

the effect of this petrol shock.

And as you said, consumer sentiment fell 12% in the month to a level of 80.

And remembering that 100 is when you've got as many optimists as pessimists, so there's a lot more pessimists out there at the moment.

And business confidence fell to minus 29, which was a sharp fall.

Now, at face value, that's really bad, of course, because when consumers and business are feeling very uneasy...

when they've got pessimism about their own economic conditions, they tend to cut back their spending, they tend to cut back their investment and their hiring, if you're a business person.

So they're really bad.

Now, the only caveat I would place on that is that we've seen in the past the COVID pandemic, the GFC and other occasional short-term shocks, we can see a spike down that recovers relatively quickly.

So

My conditioning of that is that if we were to see the oil price revert back to the $70 a barrel region, if we were to see the Straits of Hormuz opening and all these sorts of things, these things would bounce back.

But for the here and now, they are pointing to a very, very weak March, April, and even May part for the economy.

Indeed, business investment, most of it, the vast bulk of it, are long-term projects.

So, for example, a data centre, the one that's sort of very topical at the moment, that number that was boosting the business investment numbers late last year, they're still being built, you know, just because the petrol price and diesel price has gone up.

They're still hammering in the nails and laying the concrete and all these other things.

So that's going to be lingering and will not be altered.