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Australian business confidence steady in April: NAB
[SYDNEY] Australian businesses reported a slight pullback in sales and employment in April while confidence stayed restrained despite record-low interest rates, a survey showed on Monday.
National Australia Bank's monthly survey of more than 400 firms showed its index of business conditions dipped 2 points to +4 in April, undoing half of its March gain and leaving it in line with the long run average.
The measure of confidence held steady at +3 in April, keeping the March gain of 3 points. "Until confidence lifts significantly it is difficult to see a sustained economic recovery developing - to date rate cuts have not appeared to do much and it will be interesting to see what if anything this week's Federal Budget will do," said NAB's chief economist Alan Oster.
The Liberal National government of Tony Abbott delivers its second annual Budget on Tuesday promising a "dull" affair of few surprises after a deeply unpopular effort last year.
A lack of business confidence, and the resulting weakness of investment, is one reason the Reserve Bank of Australia (RBA) cut rates to an historic low of 2 per cent last week.
The survey's measure of business sales edged back a point in April but was still relatively firm at +10, while profitability eased 3 points to +5. The index of employment dropped 2 points to -2, while forward orders stayed at -1.
The capital expenditure index eased 3 points to +6 in April, though remains just above the long-run average.
Measures of labour costs and prices remained subdued in April, suggesting inflation would be no bar to further policy easing if needed. "While there is still the risk of further cuts, recent improvements in the economy suggest the RBA will pause for some time," said Mr Oster.