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Australia April business conditions surge to record high-NAB

Published 10/05/2021, 11:30 am
Updated 10/05/2021, 11:30 am
© Reuters.

By Wayne Cole

SYDNEY, May 10 (Reuters) - A measure of Australian business conditions surged to all-time highs in April as firms reported sharply increased sales, profits and employment, a sign the economy was coping well with the end of a government support programme for jobs.

National Australia Bank's NAB.AX index of business conditions jumped 8 points to +32 in April, with strength reported across most sectors and regions.

The survey's measure of confidence rose 9 points to a record +26.

"The April survey result is simply stunning – with many variables reaching survey highs," said NAB chief economist Alan Oster. "Confidence has also set a new high – pointing to ongoing strength in conditions in the near term."

"The strength in capacity utilisation points to an expansion in business investment and ongoing hiring, even as we pass the rebound phase in the economy and move through the JobKeeper hurdle," Oster added.

Capacity utilisation jumped to a very high 85.3% in April, from 82.5% in March.

"The services sectors and mining led the gains in the month, but all sectors are well into positive territory," added Oster.

The survey's index of national sales rose 5 points to another historic peak of +40 points, while profitability rose added 8 points to +33 and employment 7 points to +22.

The latter suggested the labour market was continuing its surprisingly brisk recovery, which saw the jobless rate drop to 5.5% in March from a peak of 7.5% last July.

Forward orders increased by 11 points to +26 suggesting that the pipeline of activity continues to build, even with pre-COVID levels of capacity utilisation having been restored, said Oster.

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