[SYDNEY] Australian firms reported another solid month of sales, profits and employment in April, suggesting the broader economy was coping with a protracted slowdown in mining investment.
National Australia Bank's monthly survey of more than 400 firms showed its index of business conditions dipped three points to +9 in April. That was down from its highest since early 2008 but still above the long-run average.
Its business confidence index slipped a point to +5, following a three point increase in March.
"The NAB Business Survey continues to point to a very favourable business environment for Australian firms, despite giving up some of the strong gains witnessed in last month's survey," said NAB Chief Economist Alan Oster. "Service industries have persistently been the best performers, although other sectors including manufacturing and transport are looking relatively upbeat."
That resilience has been cited by the Reserve Bank of Australia (RBA) as one reason it kept interest rates steady at 2 per cent over the last couple of months.
The central bank holds its May policy meeting on Tuesday and there is much speculation it could cut rates following a surprisingly low reading for inflation in the first quarter. "The RBA has scope to further cement the non-mining recovery with an additional rate cut - a move that seems more likely than not at its May policy meeting," added Mr Oster.
The April survey showed its index of sales dipped two points but remained strong historically at +15. The measure for profits slipped six points to +9, while employment held firm at +4.