Interpac Business and Migration Solutions Melbourne Australia

(August 14, 2010)

BUSINESS confidence rebounded to levels last seen in April as profits improved although sales and employment conditions weakened, a survey shows.

The National Australia Bank's (NAB) monthly business confidence index rose to 11 in August, reversing a decline in July.

"Business confidence rebounded 9 points in August, following three months during which overseas financial turbulence and policy uncertainty contributed to more subdued readings," NAB said.

"However, confidence has not returned to the euphoric levels recorded late last year and early this year."

The survey also showed business conditions were unchanged at an index reading of 5 points in August.

"The...index at 5 points remains just below the long term average reading of 6 points."

NAB said employment conditions were at the lowest level this year, although still in positive territory, with the index falling to 3 from seven the month before.

A reading above zero indicates optimists outweigh pessimists.

The survey found transport, recreation and mining had the strongest conditions.

It showed construction improved slightly but remained weak and retail slipped further into negative territory to remain the weakest sector.

NAB said there were "ongoing signs" of near-term softness, with capacity utilisation dipping slightly while forward orders and stocks remained in negative territory.

Ongoing retail discounting was contributing to subdued price inflation at the same time as wages continue to accelerate, NAB said.

The survey also showed a "marked increase" in the proportion of businesses seeking credit, but finance availability tightened in August.

NAB's global growth forecast was little changed at 4.7 per cent in 2010.

(Source:theAustralian)