SYDNEY (Reuters) - Australian businesses reported a marked improvement in conditions last quarter with strong sales and profits driving increased employment and boosting investment plans, a survey showed on Thursday.
National Australia Bank’s (NAB.AX) quarterly survey of around 900 firms is a more comprehensive version of its monthly surveys, which had already shown conditions were at their best since 2008 in June.
The quarterly survey’s index of business conditions rose 4 points to +13, and firms were also optimistic on the outlook for the next three to 12 months. Its measure of confidence held at +7 in the second quarter.
“A testament to how engrained the recovery in business activity has become is the fact that business conditions are now positive in all industries, including retail which has lagged behind in the current upturn,” said NAB chief economist, Alan Oster.
Its measure of sales jumped 5 points to a very strong +17, while employment rose 4 points to +10 in a sign that a recent pick up in jobs growth would prove long lasting.
“Employment expectations and capex plans remained at solid levels,” Oster added. “There are other signs of a tighter labour market, with labour costs lifting and more firms indicating that it is more difficult to find suitable labour than it was a year ago.”
Still, the survey suggested inflationary pressures were building only slowly with purchase costs and product prices rising modestly in the quarter.
Prices at the retail level actually fell 0.1 percent on a quarterly basis, suggesting the official reading for consumer price inflation due next week might also be modest.
Reporting by Wayne Cole; Editing by Sam Holmes