survey details 2012q4.pdf

7/29/2019 Survey details 2012q4.pdf

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Subscriber details December quarter 2012

Business conditions weaken to lowest level since June quarter 2009;weakness very apparent in construction, manufacturing and now mining.

Forward indicators worsen. Confidence edges lower and very subdued especially in mining. Medium-term expectations poor and capex lower again.Price pressures low, implying soft near-term core inflation. Business conditions were considerably weaker in the December quarter, deteriorating to their lowest

level since June quarter 2009. Official ABS data showed a softening in GDP growth in the Septemberquarter, and more recent activity data including retail sales and international trade point to furtherslowing in the December quarter. Our survey implies fairly tepid growth in domestic demand and GDP inthe final quarter of 2012 (2% and 2% respectively; six-monthly annualised). Forward indicators of near-term demand weakened notably to very subdued levels, further suggesting that activity will remain soft, inthe near term at least.

While still reasonably poor, business conditions appear to have held up a little better in the consumer

dependent recreation & personal services, retail and wholesale sectors in the quarter, suggesting lowerborrowing rates may be providing some support. Perhaps the most interesting development has been thedeterioration in mining conditions, where lower commodity prices have crushed the index to sub-GFClevels. Conditions deteriorated in all mainland states except Victoria, where they were unchanged andleast subdued (along with WA); conditions were very poor in Queensland.

Business confidence edged lower in the quarter and remained lacklustre overall. It appears that recentinterest rate reductions have done little to alleviate business worries about the currently soft state of thelocal economy. Weak indicators of future demand, global concerns, a still high AUD and fiscalconsolidation are likely to be weighing on expectations.

Business investment intentions (next 12 months) softened to the lowest level since September quarter2009. This seems broadly consistent with NABs view that mining investment will peak in early 2014.Near and longer term employment expectations weakened further in the quarter and point to a continuingsoft labour market. Lack of demand is expected to be the most significant factor impacting profitability

over 2013, while concerns about tax & government policy remain important.

Product price inflation remained subdued, recording annualised growth of just 0.3%. Retail price inflationwas even softer recording only marginal annualised growth in the quarter, and implying a soft Q4 coreinflation outcome. Labour and purchase costs growth softened to modestly below-average levels.

Implications for NAB forecasts:

Little change to latest Global and Australian Forecasts (released 29 January) for activity. While the RBAleft policy unchanged in February, we still think it is close to cutting (tentatively March) albeit this will bedata dependent. Beyond that, we still see two more cuts later in the year as the labour market weakens.

Key quarterly business statistics**

2012q2 2012q3 2012q4 2012q2 2012q3 2012q4

Net balance Net balance

Business confidence -4 -4 -5 Trading 1 6 -5

Business conditions Profitability -6 0 -9

Current -2 1 -6 Employment -1 -1 -3

Next 3 months 5 4 -1 Forward orders -2 -3 -8

Next 12 months 16 17 11 Stocks 1 4 -2

Capex plans (next 12) 17 14 10 Exports -1 -1 -2

% change % change

Labour costs 0.6 0.6 0.4 Retail prices 0.0 0.1 0.0

Purchase costs 0.4 0.5 0.3 Per cent

Final products prices 0.1 0.2 0.1 Capacity utilisation rate 80.4 80.6 79.4

** All data seasonally adjusted, except purchase costs and exports. Fieldwork for this Survey was conducted from 19 November to 7 December 2012,

covering over 900 firms across the non-farm business sector.

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

Next release:12 February 2013 (January Monthly)
http://business.nab.com.au/global-australian-forecasts-january-2013-2639/http://business.nab.com.au/global-australian-forecasts-january-2013-2639/


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Subscriber details

The trading conditions index declined sharply in the December quarter down 11 to -5 indexpoints more than offsetting a solid pick up in the previous quarter. While trading conditionshave moved with volatility over much of 2012, they are currently below the average level over2011 suggesting sales have generally deteriorated since. Trading conditions deteriorated in allindustries in the December quarter, with the worsening most apparent in manufacturing, mining

and construction. In contrast, trading conditions weakened only marginally in finance/ business/property. Conditions were very weak in manufacturing, construction and wholesale, while theywere much better (and positive) in recreation & personal services and transport & utilities. Near-term expected trading conditions (3-month-ahead) and longer term expectations (12-month-ahead) continued their downward trend in the quarter. Near-term expected trading conditionsweakened sharply in wholesale, mining and property services, while they improved in financeand business services.

The forward orders index fell from -3 points in the September quarter to -8 index points in theDecember quarter its lowest level since June quarter 2009. Consistent with the sharp pullback in current orders, expectations for near-term orders also weakened (down 5 to -3 indexpoints), to be well below the series long-run average (of +7 index points since 1989). Takentogether with poor employment conditions and very low levels of capacity utilisation, the overallweakness in forward indicators of demand is consistent with NABs expectation for labour

market conditions to soften into the new year.Trading expectations worsen

-40

-20

0

20

40

60

03 04 05 06 07 08 09 10 11 12 13

Trading Nxt 3 monthsNxt 12 months (n.s.a.) Conds 1990s recn

Trading conditions (net bal.)

Orders outlook very subdued

-1

0

1

2

3

4

5

6

-30

-20

-10

0

10

20

30

40

03 04 05 06 07 08 09 10 11 12 13

Non-farm GDP growth Orders (RHS)Orders nxt 3 months (RHS)

Non-farm GDP annual growth & forward orders

By industry, forward orders deteriorated significantly in wholesale, where they were weakest,followed by mining and retail. The only industry to report an improvement in orders (albeitmarginal) was transport & utilities, while orders were unchanged in recreation & personalservices. Forward orders recorded a negative net balance in all industries in the Decemberquarter (ie. negative net balance), with the weakest outcomes recorded in wholesale, miningand manufacturing.

Historically, orders in wholesale have tended to have a leading relationship with retail orders. Assuch, the particularly sharp deterioration in wholesale orders tends to suggest retailers may seefurther weakness in orders in coming months. Within retail, orders deteriorated significantly inother retail and motor vehicle retailing, while orders improved modestly in food retailing.

The stocks index fell back considerably in theDecember quarter (down 6 points to -2 indexpoints), more than offsetting a modest rise inthe previous quarter. However, three-month-ahead expectations improved a touch; thisoutcome may suggest some expectation forimproved sales in the new year.

The stocks index fell across all industries inthe December quarter, with particularly heavydeclines recorded in mining, wholesale andtransport & utilities. In levels terms, the stocksindex was lowest in construction, transport &

utilities and mining, while it was highest (andpositive) in manufacturing and retail.

Inventories fall but expected to lift

-20

-15

-10

-5

0

5

10

15

03 04 05 06 07 08 09 10 11 12 13

Stocks Nxt 3 months

Stocks (net balance, s.a.)

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Subscriber details (cont.)

Employment outlook worsens

-30

-20

-10

0

10

20

30

03 04 05 06 07 08 09 10 11 12 13

Employment Nxt 3 monthsNxt 12 months (n.s.a.)

Employment: current & expected (net balance)

Average hours worked fall back

-3

-2

-1

0

1

2

2007 2008 2009 2010 2011 2012

Quarterly Annual

Change in average hours worked (n.s.a.)

Employment conditions edged down in the

December quarter (down 2 points to -3 indexpoints), marking the fourth consecutivequarterly decline. Interestingly, our survey,along with other indicators of labour marketconditions, generally suggests moreweakness than that implied by official ABSlabour force employment data, which showfairly solid employment growth over theDecember quarter. Near-term and longer termexpectations for employment conditions bothdeteriorated notably in the quarter.

Employment conditions deteriorated verysharply in mining, while they were also

moderately weaker in transport & utilities andfinance/ business/ property. Employmentconditions improved in recreation & personalservices and retail, albeit only slightly.

Consistent with a deterioration in employment

conditions in the quarter, average hoursworked also declined, possibly reflecting amove towards shorter shifts and reduced fulltime work. The level of average hours workedin the December quarter was lower than thelevel one year earlier. Changes in averagehours worked varied across industries; hoursfell most notably in manufacturing andconstruction, while they rose marginally inretail, transport & utilities, wholesale andproperty services. In levels terms, averagehours worked were highest in mining andconstruction, while they were lowest in

recreation & personal services, financeservices and retail.

Sales still the biggest constraint on output

0

10

20

30

40

50

60

70

80

03 04 05 06 07 08 09 10 11 12

Sales & orders Labour

Constraints on current output (% of firms)

0

10

20

30

40

50

60

70

80

03 04 05 06 07 08 09 10 11 12

P remis es & plant M aterials

Constraints on current output (% of firms)

Sales remained the most constraining factor on output in the quarter with almost two-thirds offirms reporting lack of sales and orders as their biggest constraint. Labour too remained fairlyconstraining, though it was less so than in the previous quarter. Concern about labourconstraining output has declined over the past year, in line with the general softening in labour

market conditions. Premises & plant and materials were only viewed as fairly minor constraintson output, and remain significantly less constraining than they were in the lead up to the GFC,when utilised capacity was relatively tight.

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Labour costs growth fell sharply, to 1.7% (ata quarterly annualised rate) in the Decemberquarter, down from growth of 2.4% in theSeptember quarter. Consistent with ananticipated weakening in employment

conditions, expectations for near-term labourcosts imply there may be further softening inlabour costs growth in the new year.

No industries reported an increase in labourcost pressures in the December quarter. Thepull back was most apparent in mining andtransport & utilities labour costs growth, whileretail growth was unchanged. Consistent witha sharp decline in the quarter, labour costsgrowth was softest in mining, followed bymanufacturing, construction and wholesale,while it was strongest (albeit still below thenational average) in transport & utilities and

recreation & personal services.

Labour cost pressures fall notably,in line with softening employment

-4

0

4

8

12

16

-1

0

1

2

3

4

03 04 05 06 07 08 09 10 11 12 13

Wages & salaries (LHS) Current (RHS)Nxt 3 months (RHS)

Labourcosts & compensation of employees (% ann, s.a.)

The expected increase in annual average earnings under EBAs rose to 3.0% in the Decemberquarter, up from 2.9% in the September quarter, while the anticipated productivity offset wasunchanged at 0.9%, implying a slight rise in overall expected net EBA growth to 2.1%.

Labour costs growth strongest in transport & utilities and recreation;now lowest in mining

Labour costs by industry (per cent)Annualised quarterly growth (s.a.)

-4

-2

0

2

4

6

8

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

2010 2011 2012

Mining ManufConstn

-4

-2

0

2

4

6

8


2010 2011 2012

Retail WsaleTrans & ut il

-4

-2

0

2

4

6

8


2010 2011 2012

Rec & pers Fin, prop & bus

Expected net EBA growth highest in transport & utilities;lowest in retail and wholesale

Mining Manuf Const Retail Wsale Trans

Rec. &

pers.

Fin. prop.

& bus. Aust.

Expected EBA growth 3.1 3.1 3.2 2.4 2.7 3.7 2.9 3.2 3.0

Productivity offset 1.7 1.0 0.3 1.3 0.6 1.0 0.7 0.6 0.9

Net EBA growth 1.5 2.0 2.9 1.2 2.1 2.7 2.2 2.6 2.1

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Margins weaken and remain tight

-40

-30

-20

-10

0

10

20

-40

-30

-20

-10

0

10

20

03 04 05 06 07 08 09 10 11 12 13

Margins Nxt 3 months

Sales margins (net balance)

Retailers in line with national av.

-40

-30

-20

-10

0

10

20

-40

-30

-20

-10

0

10

20

03 04 05 06 07 08 09 10 11 12 13

Retail margi ns Nx t 3 months

Retail sales margins (net balance)

The margins index deteriorated in the December quarter (down 5 to -17 points), falling to its

lowest level since June quarter 2009. Three-month-ahead expectations also softened, implyingmargins will remain tight in the first quarter of 2013. The expectation for fairly soft margins inthe near term, combined with a general weakening in expectations for labour and purchasecosts growth, implies little anticipated improvement in near-term sales and output. The marginsindex remained negative across all industries for a third consecutive quarter, with particularlyweak outcomes recorded for finance services, mining and construction. Retail marginsdeteriorated modestly in the quarter consistent with a modest weakening in retail conditions and remained subdued overall.

Capacity utilisation still highest in transport albeit declining,lowest in manufacturing and mining

Capacity utilisation by industry (s.a., per cent)

72

76

80

84

88

92


2010 2011 2012

Australia MiningManuf Constn

72

76

80

84

88

92


2010 2011 2012

Australia RetailWsale Transp & util

72

76

80

84

88

92


2010 2011 2012

Australia Rec & persFin, prop & bus

Capacity utilisation (seasonally adjusted) declined to its lowest level since June quarter 2001 down 1.2 ppts to 79.4% in the December quarter. The decline in utilised capacity largelyreflected a very sharp decline in the mining sector. This is consistent with anecdotal evidencethat some marginal projects have been deferred or cancelled in response to the recentmoderation in commodity prices in particular coal. Nonetheless, while we expect the mininginvestment boom to plateau in early 2014, the pipeline of Australian resource projects(dominated by mega gas and bulk commodity projects) remains large. Aside from mining,capacity utilisation also declined notably in transport & utilities, finance/ business/ property,manufacturing and retail, while construction was the only industry to report an increase inutilised capacity in the quarter. In levels terms, capacity utilisation was highest in transport &utilities and recreation & personal services consistent with relatively strong conditions inthese industries and lowest in manufacturing and mining.

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Long-term expected conditions shift down across all mainland states

Business conditions by state: actual & expected (net balance)

-40

-20

0

20

40

2010 2011 2012 2013

NSW Nxt 3 mthsNxt 12 mths (n.s.a.)

-40

-20

0

20

40

2010 2011 2012 2013

VIC Nxt 3 mthsNxt 12 mths (n.s.a.)

40

20

0

20

40

2010 2011 2012 2013

QLD Nxt 3 mthsNxt 12 mths (n.s.a.)

Business conditions by state: actual & expected (net balance)

-40

-20

0

20

40

2010 2011 2012 2013

SA Nxt 3 mthsNxt 12 mths (n.s.a.)

-40

-20

0

20

40

2010 2011 2012 2013

WA Nxt 3 mthsNxt 12 mths (n.s.a.)

40

20

0

20

40

2010 2011 2012 2013

Australia Nxt 3 mthsNxt 12 mths (n.s.a.)

Business conditions deteriorated across all mainland states in the December quarter, with theexception of Victoria, where they were unchanged at a relatively less subdued level (albeit stillnegative). There has been a marked convergence in conditions across states over recentyears, which is particularly evident when Queensland (-11 points) is removed from the picture;conditions of the remaining states ranged between -6 points (NSW) and -2 points (Victoria andWA). Another notable feature is the poor level of activity across all states, as indicated bynegative readings.

The December quarter Survey highlights a clear downward shift in business expectations forfuture activity. Near-term expected conditions (next three months) worsened across allmainland states, with particularly sharp deteriorations recorded for SA, WA, Queensland andNSW. Near-term conditions also deteriorated in Victoria, though only marginally. It is likely thatthe weakness in forward looking indicators of demand is having an impact on near-termexpectations. Expectations for near-term activity are broadly similar across the mainlandstates, ranging from -2 points in SA and Queensland, to +1 point in WA.

Longer term expected business conditions also deteriorated across all mainland states in theDecember quarter, with particularly heavy declines recorded in the big mining states WA andQueensland which is consistent with a softer outlook for global commodities demand.Nonetheless, expectations are still highest in Queensland, followed by SA, while they arelowest in Victoria.

Business conditions in Tasmania improved solidly in the December quarter. While the level ofactivity in Tasmania implied by the Survey remains poor, conditions have improvedconsiderably over recent quarters, lifting from a recent low of -37 points in September quarter2011, to the current level of -4 points (on a small sample). Near-term expectations were a littlebetter and longer term expectations were unchanged; expectations in Tasmania, while better,

remain at a relatively low level when compared to the mainland states. It is likely thatgovernment downsizing will have a particularly big impact on the Tasmanian economy.

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Employment expectations weaken across all states

Employment by state: actual & expected (net balance)

-40

-30

-20

-10

0

10

20

30

40

2010 2011 2012 2013

NSW Nxt 3 mthsNxt 12 mths (n.s.a.)

-40

-30

-20

-10

0

10

20

30

40

2010 2011 2012 2013

VIC Nxt 3 mthsNxt 12 mths (n.s.a.)

-40

-30

-20

-10

0

10

20

30

40

2010 2011 2012 2013

QLD Nxt 3 mthsNxt 12 mths (n.s.a.)

Employment by state: actual & expected (net balance)

-40

-30

-20

-10

0

10

20

30

40

2010 2011 2012 2013

SA Nxt 3 mthsNxt 12 mths (n.s.a.)

-40

-30

-20

-10

0

10

20

30

40

2010 2011 2012 2013

WA Nxt 3 mthsNxt 12 mths (n.s.a.)

-40

-30

-20

-10

0

10

20

30

40

2010 2011 2012 2013

Australia Nxt 3 mthsNxt 12 mths (n.s.a.)

Employment conditions deteriorated modestly in WA and NSW in the December quarter, whilethey were marginally better in Victoria the only state to report an improvement. Employmentconditions remain reasonably consistent across the mainland states, with conditions in NSW,Victoria, SA and WA separated by just 1 index point (ranging between -1 and -2 index points),while Queensland was the outlier (-6 index points).

Near-term expectations (three months ahead) for employment conditions deteriorated across

all of the mainland states in the December quarter. Employment expectations in SAdeteriorated particularly sharply, while conditions also weakened considerably in Victoria,Queensland and WA. Expectations held up better in NSW, softening only marginally in thequarter. Near-term expectations were weakest in Victoria and Queensland, while they wereleast subdued in SA, NSW and WA.

Longer term expectations of employment conditions (12 months ahead) deteriorated across allmainland states in the quarter, with particularly heavy declines reported in WA, Victoria andNSW. The broad-based nature of the deterioration in employment conditions suggests that thestructural adjustment process that has taken place within the Australian economy inresponse to the mining boom is expected to continue to weigh on employment conditionsover the year ahead as a result of the frictional nature of adjustment (ie. time taken to re-trainand re-hire workers). In levels terms, expectations varied across states, with optimism stillpresent in Queensland and, to a lesser degree, SA, while Victoria was quite pessimistic.

Employment conditions were little changed in Tasmania, at a very subdued level, while near-term expectations improved solidly, partly offsetting a significant deterioration in the previousquarter. Longer term expectations were unchanged, remaining very weak overall.

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Capex plans soften, particularly in WA

Business confidence, investment and capex plans by state (net balance)

-40

-30

-20

-10

0

10

20

30

40

-40

-30

-20

-10

0

10

20

30

40

2009 2010 2011 2012 2013

NSW Capex 12m adv 2 qtrs (n.s.a., RHS)

-40

-30

-20

-10

0

10

20

30

40

-40

-30

-20

-10

0

10

20

30

40

2009 2010 2011 2012 2013

VIC Capex 12m adv 2 qtrs (n.s.a., RHS)

-40

-30

-20

-10

0

10

20

30

40

-40

-30

-20

-10

0

10

20

30

40

2009 2010 2011 2012 2013

QLD Capex 12m adv 2 qtrs (n.s .a., RHS)

-40

-20

0

20

40

60

-40

-20

0

20

40

60

2009 2010 2011 2012 2013

NSW bus. inv. ann. growthCapex 12m adv 2 qtrs (n.s.a., RHS)

-40

-20

0

20

40

60

-40

-20

0

20

40

60

2009 2010 2011 2012 2013

VIC bus. inv. ann. growthCapex 12m adv 2 qtrs (n.s.a., RHS)

-40

-20

0

20

40

60

-40

-20

0

20

40

60

2009 2010 2011 2012 2013

QLD bus. inv. ann. growthCapex 12m adv 2 qtrs (n.s.a., RHS)

Business confidence, investment and capex plans by state (net balance)

-40

-30

-20

-10

0

10

20

30

40

-40

-30

-20

-10

0

10

20

30

40

2009 2010 2011 2012 2013

SA Capex 12m adv 2 qtrs (n.s.a., RHS)

-40

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-20

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0

10

20

30

40

-40

-30

-20

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0

10

20

30

40

2009 2010 2011 2012 2013

WA Capex 12m adv 2 qt rs (n.s.a. , RHS)

-40

-30

-20

-10

0

10

20

30

40

-40

-30

-20

-10

0

10

20

30

40

2009 2010 2011 2012 2013

Australia Capex 12m adv 2 qtrs (n.s.a., RHS)

-40

-20

0

20

40

60

-40

-20

0

20

40

60

2009 2010 2011 2012 2013

SA bus. inv. ann. growthCapex 12m adv 2 qtrs (n.s.a., RHS)

-40

-20

0

20

40

60

-40

-20

0

20

40

60

2009 2010 2011 2012 2013

WA bus. inv. ann. growthCapex 12m adv 2 qtrs (n.s.a., RHS)

-40

-20

0

20

40

60

-40

-20

0

20

40

60

2009 2010 2011 2012 2013

Bus. inv. ann. growthCapex 12m adv 2 qtrs (n.s.a., RHS)

The softened outlook for global commodities demand appears to be having an impact onconfidence and capex expectations, particularly in the mining states (Queensland and WA).Business confidence weakened moderately in WA, NSW and SA in the December quarter,while it improved marginally in Queensland and was unchanged in Victoria. In levels terms,confidence was generally poor and not too dissimilar across states. Expectations for capex

were not too dissimilar across the mainland states; while they were relatively stronger in WA,expectations did deteriorate fairly noticeably in the quarter implying the softened outlook forglobal commodities demand is weighing on expectations for further investment.

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Finance hardest to obtain in construction; demand for borrowing highestin property, lowest in business and recreation services

Ease of borrowing index (n.s.a., net balance, easier less more difficult)

-40

-30

-20

-10

0

10

20

2009 2010 2011 2012

Australia Mining

Manuf Constn

-40

-30

-20

-10

0

10

20

2009 2010 2011 2012

Australia Retail

Wsale Transp & util

-40

-30

-20

-10

0

10

20

2009 2010 2011 2012

Australia Rec & pers

Fin, prop & bus

Respondents requiring no borrowing (n.s.a., per cent)

20

30

40

50

60

70

2009 2010 2011 2012

Australia MiningManuf Constn

20

30

0

50

60

70

2009 2010 2011 2012

Australia RetailWsale Transp & util

20

30

40

50

60

70

2009 2010 2011 2012

Australia Rec & persFin, prop & bus

In the December quarter, borrowing became significantly easier to obtain in property services,while it was moderately easier to obtaining in transport & utilities and construction. In contrast,finance was notably more difficult to obtain in manufacturing and finance services. Overall,finance was easiest to obtain in transport & utilities, while it was most difficult in construction,manufacturing and wholesale.

Most industries reported a reduction in required borrowing in the December quarter, with the

exception of transport & utilities and wholesale, where demand for finance fell modestly. Theleast borrowing was required in business services and recreation & personal services, whileproperty services, mining, transport & utilities and construction required the most borrowing ofall industries.

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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 8035Vacant 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 BankingPeter 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

Tom Vosa Head of Market Economics - Europe +(44 20) 7710 1573

Vacant Market Economist Europe +(44 20) 7710 2910

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

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US DISCLAIMER: If this document is distributed in the United States, such distribution is by nabSecurities, LLC. This document is not intended as an offer or solicitation for the purchase orsale of any securities, financial instrument or product or to provide financial services. It is not the intention of nabSecurities to create legal relations on the basis of information provided herein.

NEW ZEALAND DISCLAIMER: This publication has been pr ovided for general information only. Although every ef fort has been made to ensure thi s publication is accurate the contentsshould not be relied upon or used as a basis for entering into any products described in this publication. To the extent that any information or recommendations in this publication constitutefinancial advice, they do not take into account any persons particular financial situation or goals. Bank of New Zealand strongly recommends readers seek independent legal/financial adviceprior to acting in relat ion to any of the matter s discussed in this publication. Neither Bank of New Zealand nor any person involved in thi s publication accepts any liability for any loss ordamage whatsoever may directly or indirectly result from any advice, opinion, information, representation or omission, whether negligent or otherwise, contained in this publication. NationalAustralian Bank Limited is not a registered bank in New Zealand.

JAPAN DISCLAIMER: National Australia Bank Ltd. has no license of securities-related business in Japan. Therefore, this document is only for your information purpose and is not intended asan offer or solicitation for the purchase or sale of the securities described herein or for any other action.

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