- National Australia Bank
Australia's business conditions and confidence improved significantly in March, suggesting a broad based economic recovery may be round the corner. The National Australia Bank Business Confidence Index surged from 3 in February to 6 last month, while the NAB Business Conditions Index soared 8 to 12, the highest reading since the global financial crisis. Importantly, the increase was driven by an improvement in the three main components of the conditions index: trade, profit and employment. The employment sub-index of the confidence barometer was particularly sturdy, rising up 4 points to 5, while improved capacity utilisation indicates this trend will persist. The headline improvement in conditions and sentiment spread to most sectors and industries, with even underperformers such as manufacturing and transport more optimistic on their prospects.
Last week the Reserve Bank of Australia kept the official cash rate at a record-low 2.0%, but expressed its discontent with the recent strength of the Australian Dollar. However, the business survey indicates that despite the appreciation of the Aussie Dollar, firms are upbeat on how the domestic economy is progressing.
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