SYDNEY, July 8 A measure of Australian business
conditions hit the highest in five months in June as a pick up
in sales and profits helped firms stay confident in the wake of
an unpopular federal budget.
National Australia Bank's survey of more than 400
firms showed its index of business confidence ticked up a point
to +8 in June, just above the series' long-run average.
The report's index of business conditions rebounded by 3
points to +2, the highest reading since January. Its measure of
sales climbed 5 points to +7, while that for profitability rose
6 points to +3.
"Business confidence recorded an unexpected increase in the
month, with firms apparently shrugging off the sharp
deterioration in consumer confidence that followed May's Federal
budget," said NAB's chief economist, Alan Oster.
"Stronger sales are contributing to elevated confidence
levels, with the survey suggesting this has encouraged firms to
invest and rebuild their inventories."
Conditions improved across industries, with construction in
the lead as home building gathered steam.
The Reserve Bank of Australia (RBA) has been counting on a
revival in residential construction to help support the economy
as a long boom in mining investment fades.
The central bank has held interest rates at a record low of
2.5 percent since last August, and is expected to keep them
there for quite a few months yet.
NAB's survey suggested inflation would be no threat to the
policy outlook, with firms reporting a moderation in labour
costs and purchasing prices. Retail inflation also remained at
low levels in June.
One area of softness was in employment, where the survey's
measure dipped to -3 in June led by weakness in the mining and
(Reporting by Wayne Cole; Editing by Kim Coghill)