[SYDNEY] An index of Australian business conditions jumped to record-matching highs in April as firms reported broad-based strength in sales, profits and employment, suggesting the economy started the second quarter in healthy shape.
Monday’s survey from National Australia Bank showed its index of business conditions rose 6 points to +21 in April, far above the long-run average of +5.5 and matching the highest reading since the survey began in 1997.
The survey’s measure of profitability gained 6 points to +22 in April, while its sales index firmed 7 points to a very high +28. The employment index added 4 points to +13, while the often volatile measure of business confidence rebounded 2 points to +10.
Conditions increased in all industries except for manufacturing and retail and were strongest in mining, finance, business & property, construction and recreation & personal services.
“The strength in business conditions and leading indicators suggest economic growth will strengthen and that over-time we should see strong jobs growth and falls in the unemployment rate,” said NAB group chief economist Alan Oster.
The Reserve Bank of Australia (RBA) highlighted the upbeat outlook of businesses last week when it forecast economic growth would top 3 per cent this year and next.
Despite the robust readings on activity, the NAB survey found little evidence of faster inflation with retail prices subdued and labour costs around their average level over the last year. REUTERS
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