[SYDNEY] Australian business confidence rebounded in September as sales and profits held firm, a survey showed on Tuesday, while a measure on employment intentions jumped to its highest since mid-2011.
National Australia Bank's monthly survey of more than 400 firms showed its index of business conditions held at an above-average +9 in September while confidence climbed 4 points to +5. "Overall, the business survey suggest a good degree of resilience in what appears to be a building non-mining sector recovery," said NAB's chief economist Alan Oster. "This is particularly apparent in industries thought to be highly responsive to currency changes in the near-term, including personal and business services." The survey's index of sales eased four points in September but at +15 remained well above its long-run average. Profitability dipped two points but was again firm at +8. A majority of industries reported improved conditions with only mining and manufacturing in the red.
There was a notable pick up in the outlook for hiring with NAB's measure of employment rising five points to +4, the highest in four years. "Consistently above-average outcomes since March suggest that the improved momentum in the non-mining economy is not merely an aberration, but has become much more ingrained," said Oster.
There were also brighter signs for business investment with the survey's index of capital expenditure edging up to +7 in September, thanks mainly to the services sector.
Capacity utilisation likewise ticked up to 81.3 per cent, matching its highest since early 2012. "The trend continues to show improvement, which provides some optimism on the outlook for non-mining business investment and the labour market," said Oster.
The Reserve Bank of Australia has long been hoping for a revival in spending by firms outside of the mining sector which is suffering from weaker commodity prices.