Australian Business Sentiment ‘Stunning’ as New Records Reached

(Bloomberg) --

Australia’s business sentiment broke new records in April in a result National Australia Bank Ltd.’s Alan Oster described as “simply stunning,” with the employment, profitability and trading indicators all surging.

Business confidence climbed to 26 points from an upwardly revised 17 in March, NAB said in a statement Monday. The conditions index -- measuring hiring, sales and profits -- jumped to 32 points from a revised 24.

“It looks like we have moved past the rebound phase of the recovery and are now seeing healthy growth in most of the economy,” said Oster, chief economist at NAB. “It is increasingly likely the expectations for business investment we have seen in our surveys and the Australian Bureau of Statistics data will materialize. It should also result in ongoing employment growth.”

The Reserve Bank of Australia closely monitors sentiment surveys and will likely be encouraged by the positive signal for higher investment and hiring. The central bank and government pumped stimulus to help shield the economy from the pandemic and have pledged to keep up support as they bid for maximum employment to revive wage growth and inflation.

The RBA says it’s likely to keep interest rates near zero until at least 2024 as it tries to achieve those goals. The government meantime is expected to announce more infrastructure and employment-heavy aged care spending in Tuesday’s budget as it also maintains support for hiring.

“Price pressures appear to be building with survey measures trending higher, but for now official measures and the inflation outlook remain soft,” NAB said in the release.

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