- A gauge of Australian business conditions has extended its already impressive run, reaching an all-time high in May
- After jumping eight points in April, National Australia Bank’s index of business conditions climbed five points to +37 in May
- NAB’s measure of confidence, however, dropped three points to +20, although that figure is still historically high
- The survey measure for trading rose six points to reach +47, while profitability gained six points to +40 and employment five points to +25
- It follows data published last week that shows GDP grew 1.8 per cent in the first quarter of this year to reach pre-pandemic levels
A gauge of Australian business conditions has extended its already impressive run, reaching an all-time high in May with sales, profits and employment all up strongly.
After jumping eight points in April, National Australia Bank’s index of business conditions climbed five points to +37 in May, showing strength across all industry sectors.
NAB’s measure of confidence, however, dropped three points to +20, although that figure is still historically high.
“Conditions rose further, and in particular trading conditions are at a massive +47 index points,” said NAB chief economist Alan Oster.
“Confidence was slightly softer but remains very high and the pipeline of work as measured by forward orders held at a high level.”
The survey measure for trading — or sales — rose six points to reach +47, while profitability gained six points to +40 and employment five points to +25.
“This was another very strong read for the business sector and forward indicators point to ongoing strength in the near-term,” Mr Oster continued.
“The economy now appears to be entering a new period of growth after a very rapid rebound.”
Data published last week shows gross domestic product (GDP) grew 1.8 per cent in the first quarter of this year to reach pre-pandemic levels, while figures from ANZ released yesterday claimed Australian job advertisements during May hit the most since 2008.
The 213,894 ads posted last month represent a 220 per cent increase compared to a year ago when lockdown measures put the brakes on many industries. The latest lockdown in Victoria, however, is yet to have an impact.
“The Victorian lockdown is unlikely to derail the state’s labour market recovery,” said ANZ senior economist Catherine Birch.
“Even if we see some employment losses in June, as long as restrictions start easing from 11 June as currently planned, workers should be reinstated or find new jobs quite quickly, given the underlying strength in the labour market.”