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Australia’s business environment continued to be very favourable for players in recent months, with conditions rising to a new record high in May, according to the latest NAB Monthly Business Survey.
Business conditions were driven by the improvement in trading, employment, and profitability. While business confidence edged lower, the overall rating remains elevated.
“Confidence was slightly softer but remains very high and the pipeline of work as measured by forward orders held at a high level,” said Alan Oster, group chief economist at NAB.
Conditions are elevated in the industries of finance, business and property services. On the other hand, conditions slightly eased for mining, and recreation and personal.
All states, save for Queensland, reported improvement in business conditions over the month. New South Wales and Victoria led the overall improvement over the month, but Queensland and Western Australia had the biggest improvement in trend terms. Confidence, on the other hand, fell in all states over the month.
“The ongoing strength in conditions is promising – as it suggests the economy has continued to grow after recovering its pre-COVID level in Q1. The ongoing strength across all industries reflects those that are still recovering but also other sectors such as construction and manufacturing which have moved into a new growth phase,” Oster said.
Oster said these recent gains in business conditions point to ongoing strength in the near-term.
“This is a pleasing result coming after last week’s national accounts which showed that the economy has now surpassed its pre-COVID level. The economy now appears to be entering a new period of growth after a very rapid rebound,” he said.
