According to a new study from the National Australian Bank, the business confidence and conditions have drastically fallen in Australian is Q2 of 2019, with the remnants of the issues spilling well over in Q3.
On a more detailed level, it needs to be said that the Business Confidence Index dropped from 4 to 1 in August, while the Business Condition index dropped from 3 to 1. Naturally, this is an astounding loss in terms of future capabilities of remaining profitable, or in the worst-case scenario, surviving a major global recession.
The reasons can also be associated with the slight downfall of the AUD against the USD in 2019.
To be more exact, AUD started at $0.69 at the start of the year, after which it managed to reach a peak of $0.72 in the first quarter, but failed to maintain balance and bounced right back down to $0.69 at the moment of writing this article.
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Although it may seem like an insignificant decrease, let’s not forget that AUD is one of the major currencies of the world, therefore even a single cent lost to volatility is a great hit to the economy.
The NAB further states that in terms of conditions, confidence and overall profitability the mining industry seems to be the most stable one out of all that Australia can muster.
However, recent studies also show that Australia’s already large gaming industry is showing no signs of stopping its growth pattern and continues to expand well beyond its borders.
A representative from Playamo AU, a local gaming operator mentioned:
“It was obvious that Q2 of 2019 was little less than a disaster. The revenue was down, the currency was depreciating and the overall operations were at risk. But this was just by looking at the paper and not doing too much research.
Once we saw the decline in revenue, it almost felt like a 50% hit to overall performance, but luckily, we have offshore operations as well.
Thanks to those offshore operations, where we are usually paid in USD or EUR, we managed to compensate for the relatively small losses or no gains in the Australian market.
However, we still believe that the gaming market here has much more potential, as long as the government doesn’t interfere too much”.
What could be derived from these facts?
One of the most important takeaways from the explanation of the Playamo representative could be the additional hostility the Australian government could start seeing towards the gaming industry.
Almost every government’s ideal economic plan is a diversified economy, where consumer spending is really divided into both private and state sectors. Having so many funds concentrated in just one industry, to a point where companies had only slight issues with revenue is already an alarming revelation.
Naturally, the funds spent on these platforms are going to return to the government via corporate tax, but in a sense, they will be sacrificing almost all the other retail sectors.
It is quite possible that this study by NAB, will lead to new guidelines and corrections in the country’s fiscal and monetary policies, to somehow get the economy back on track.
Although it is always best to let the economy sort itself out, a slight push or direction can do wonders for the whole process.