Australian business conditions bounce but confidence sags
SYDNEY, April 1 (Reuters) - A closely-watched measure of
Australian business conditions rose in March led by gains in
sales and profitability but confidence weakened further to stay
The National Australia Bank's index of business
conditions, released on Monday, rose 3 points to +7 in February.
The survey's volatile measure of business confidence - which
measures expectation for conditions going forward - declined 2
points to 0, having been much softer than conditions in recent
Other forward-looking indicators showed some improvement but
remained at or below average.
Forward orders, the most reliable indicator of domestic
demand, rose 1 point to -1 while the capacity utilisation rate
nudged up to 81 percent. The reading on employment rose 2 points
The labour market has been one of the strongest sectors of
an otherwise mixed economy, with the jobless rate declining
steadily to an eight-year trough of 4.9 percent.
"We will continue to watch the survey closely over coming
months," said NAB Group Chief Economist Alan Oster.
"With activity having already slowed, it is important to
assess whether this is temporary or has persisted into 2019 –
the survey suggests this may be the case at least for Q1," Oster
"For now the survey suggests labour market conditions have
remained healthy but we are also watching this closely given it
may well be a lagging indicator."
Steep falls in home prices and a tightening of lending
conditions by banks have combined with subdued wage growth and
inflation to darken the outlook for the economy, which slowed
sharply in the second half of 2018.
The central bank had touted the strength of business
conditions as one reason for optimism so March's bounce will be
The March survey's measure of sales jumped 4 points to +12,
while profitability too gained 4 points to +5.
(Reporting by Swati Pandey; Editing by Sam Holmes)
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