Business buoyed by rising sales
More businesses say their profits and sales are improving than at any time in at least the last 20 years, while there remains no trace of inflation.
The National Australia Bank’s monthly business survey shows 21 per cent more businesses say trading conditions have improved than those who say they are worse, the biggest margin since the monthly survey began in 1997.
Even in the troubled retailing sector, views about whether conditions are improving or not are now evenly split, halting a downward trend evident since the middle of the year.
Economists were cautious about placing too much weight on the survey result, noting that the biggest improvement had come from manufacturing, which did not seem plausible.
NAB head of Australian economics Riki Polygenis noted the gains appeared to be driven by building materials manufacturers, predominantly in NSW, where very strong growth in building and infrastructure construction was driving demand.
“Even if it comes back to September levels next month, it is consistent with a very strong trend, broadening across industries,” she said.
Business conditions are strongest in NSW but rose in all states except South Australia and are at elevated levels everywhere except Western Australia where the number of firms reporting improved trading evenly match those suffering a downturn.
A net 7 per cent of firms are increasing hiring, the same level as in September.
The Reserve Bank’s latest economic review highlights strong measures of business conditions in support of its view that business investment is lifting. The NAB survey shows a net 12 per Grail simply arriving with a company tax cut. Changes on a canvas of this kind are not going to drop from any department. You will not find them falling from a Treasury printer.
“They require imagination — the principal tool that was employed in underwriting the 80s and 90s changes.”
Mr Keating said the economy was “crying out for liberating forces” similar to those employed during the 80s and 90s. He said that period had paved the way for the 26 subsequent years of continuous growth, during which Australia’s GDP had doubled, exceeding the growth of any other major advanced economy, while real incomes had risen by two-thirds and the net wealth of Australian households had risen more than sevenfold.
Mr Keating said it would be important that Australia maintained a commitment to equity and inclusion as it managed the transformation of technology. “We can see in America today what the loss of these balances means, watching the extremes of income and wealth rip at the fabric of American society.” cent of businesses are increasing their investment.
A smaller number of businesses say they are confident that the strong conditions will continue. A net 8 per cent of businesses report improved confidence.