[SYDNEY] Australian businesses saw a marked improvement in sales and profits last quarter and turned notably more optimistic on the longer-term outlook for activity and investment, a survey showed on Thursday.
National Australia Bank's index of business conditions rose 6 points to +11 in the three months to end September, based on its quarterly survey of more than 920 firms.
While its measure of confidence declined 4 points to 0, NAB said that fall reflected the timing of survey which came when emerging market concerns were particularly severe.
NAB's monthly version of the survey published last week reported a rebound in confidence in September alone. "The quarterly survey confirms the trend improvement in current conditions in the non-mining economy, while the outlook is also looking notably better," said NAB's chief economist Alan Oster. "Lower interest rates and currency depreciation appear to be having the desired effects." The survey's measure of sales jumped 7 points to +13 while the profitability score rose by the same amount to +11. In a sign the improvement could prove lasting, a 4 point increase in forward orders to +5 took that index to the highest since 2009.
Firms were also more upbeat on the outlook, with the index of expectations for the next three months rising to +13 and for 12 months at a lofty +25.
As a result, many expected to lift their investment spending with the index for capex plans over the next 12 months rising to +20.
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 weak commodity prices.