SYDNEY • A measure of Australian business conditions eased just a touch from decade highs last month with growth reported across all sectors, a sign that the economy may have picked up speed after a sluggish first quarter.
National Australia Bank (NAB) surveyed more than 400 firms to compile its index of business conditions, which dipped a point to +12 last month, still well above the long-run average of +5.
The survey's measure of business confidence fell 6 points to +7, though that merely retraced a jump in April and left it a point above the long-run average.
"The strength looks to be quite broad-based, with all industries recording positive business conditions for only the second time since 2010," said NAB chief economist Alan Oster.
The run of upbeat surveys held out hope for a bounce in economic activity after bad weather kept growth to just 0.3 per cent in the first quarter.
"We continue to expect economic growth to accelerate in the second half following weather-related disruptions in the first half of the year," said Mr Oster. "But the longer-term outlook could be less sanguine in our view as important growth drivers begin to fade."
The Reserve Bank of Australia argued that growth would revive when it held interest rates steady at 1.5 per cent following a monthly policy meeting last week.
The main pullback in NAB's May survey came in its measure of business profits, which eased 4 points to +10, while business sales held at a historically high +17. The measure of employment dipped a point to +6 but again was above average.
NAB said that outcome was consistent with annual job creation of around 230,000, or around 19,000 per month, and was enough to nudge the unemployment rate lower from the current level of 5.7 per cent.
Forward orders also held at a firm +3, suggesting the improvement in demand could have legs.
The survey's measure of capacity utilisation jumped a full percentage point to 82.4 per cent, which could bode well for business investment.
There was still little sign of inflationary pressure in the survey, with labour costs subdued. Retail prices actually fell at a quarterly rate of 0.2 per cent, suggesting some downside risks for consumer price inflation in the second quarter.