[SYDNEY] A measure of Australian business conditions boasted the biggest increase on record in October as firms reported stronger sales, profits and employment, a possible sign the economy was gaining momentum into the last quarter of the year.
National Australia Bank's survey of more than 400 firms showed its index of business conditions surged to +13 in October, from just +1 in September. This was the largest monthly gain since the survey began in 1998 and took the index to its highest since early 2008.
Oddly, however, the survey's measure of business confidence actually dipped a point in the month to stand at +4, perhaps because firms were uncertain whether the better times would be sustained.
Still, the improvement in conditions was broad based across the survey's measures of activity and by industry.
Its index of sales surged 13 points in October to +20, while profitability climbed 14 points to +15 and employment 7 points to +2.
The measure of forward orders also picked up to +4 led by a sharp rise in construction, a positive sign for future growth. All industries bar wholesale reported stronger orders for the month.
Businesses also reported a firmer outlook for capital spending with that index rising 4 points to +9, well above its long-run average of +5.
That would be pleasing to the Reserve Bank of Australia (RBA) which has been hoping for a revival in non-mining investment to help offset a cooling in the resources sector.
NAB's survey found inflationary pressures remained restrained with wages growth subdued and purchase costs up only modestly.