SYDNEY Dec 10 A measure of Australian business
conditions improved modestly in November as sales and
profitability picked up, leaving most sectors relatively
optimistic about the outlook for the next few months, a survey
showed on Tuesday.
National Australia Bank's survey of more than 600
firms showed most interest sensitive sectors reported better
activity in November, while a lower local dollar seemed to
benefit mining and manufacturing.
The report's main measure of business confidence ticked down
a point to 5, from an upwardly revised 6 in October, but was
still well above the average for 2013.
The survey's index of business conditions gained a point to
-3 in November, with its measure of sales turning positive for
the first time in over a year. Profitability also improved,
though employment took a turn for the worse in the month.
"Business conditions, while still below trend, have trended
higher over recent months, supported by the low interest rate
environment, higher asset prices and less lofty Australian
dollar," said NAB's chief economist, Alan Oster.
One positive was a broad based rise in the index of capital
expenditure, which jumped 9 points to 5 in November, the highest
reading since March of 2012.
That would be welcome news to the Reserve Bank of Australia
(RBA) which has been counting on a revival in business
investment to offset the drag from a cooling mining boom.
The central bank cut interest rates to a record low of 2.5
percent back in August and has been holding steady since amid
signs the stimulus was slowly working through the economy.
Oster still believes that soft domestic demand and rising
unemployment will lead the RBA to cut rates again, albeit not
until May next year.
Tuesday's survey found firms reported that capacity
utilisation had increased four tenths of a percent to 79.7
percent in November, though that still pointed to a considerable
amount of slack in the economy.
There was little sign of inflationary pressure in the NAB
survey. Labour cost growth held steady at restrained levels,
consistent with slack in the labour market, while purchase costs
growth eased a touch.
Overall prices growth softened further in November to be
running at just 0.2 percent at a quarterly rate.
(Reporting by Wayne Cole; Editing by Shri Navaratnam)