Australian Business Optimism Surges as Firms See Strong Rebound

(Bloomberg) -- Australian business sentiment surged in October as firms anticipated a strong recovery in the economy following the lifting of virus-induced lockdowns in the nation’s two largest states.

Business confidence jumped to 21 points from a revised 10 in September, National Australia Bank Ltd. said in a statement Tuesday. The conditions index -- measuring hiring, sales and profits -- advanced to 11 points from 5. The survey ran from Oct. 19-29.

“Confidence is now back in positive territory across all states and in all industries, signaling that there is broad optimism about the way the recovery is tracking,” said Alan Oster, chief economist at NAB. “The large improvement in forward orders provides further evidence of the strong rebound in economic activity that is underway.”

New South Wales and Victoria have dropped stay-at-home orders after the two states reached their vaccination targets, ending a protracted lockdown that’s likely to see a sharp contraction in the economy in the third quarter. Oster said the survey showed a build up in price pressures in the economy in response to elevated goods demand, border restrictions and other factors.

“These remain largely in the form of pressure on input costs,” he said. “These pressures should pull back as global supply chain disruptions ease and labor markets normalize, although this process may take some time yet.”

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