SYDNEY (Reuters) - A closely-watched measure of Australian business confidence improved in July but conditions remained sub-par and employment waned in a worrying sign for the economy, a survey showed on Tuesday.
National Australia Bank’s (NAB.AX) index of business conditions fell 2 points to +2 in July, reversing a rise in June. The survey’s measure of business confidence edged up to +4, but still remained below the long-run average.
“The decline in business conditions since early 2018 has been broad-based and has continued to track at below average levels in recent months,” said NAB group chief economist Alan Oster.
“This is concerning, because while conditions remain positive, it points to a significant loss in momentum in the business sector.”
The economy expanded at its slowest pace in a decade in the first quarter of the year as consumers kept a tight rein on spending amid sluggish wages and falling home prices.
The Reserve Bank of Australia (RBA) responded by cutting interest rates by a quarter point in both June and July, taking them to a record low of 1%.
“The survey points to the need to for further stimulus in the economy,” said Oster.
“Indeed, we expect a further easing in interest rates from the RBA and think that some greater fiscal support will be needed from the government to kickstart growth.”
Reporting by Wayne Cole; Editing by Sam Holmes