Australia’s business sentiment and conditions reversed in April from March’s peak. However, it continues to be around elevated levels witnessed is the past year. Other business surveys also indicate that confidence continues to be strong. Capacity and profitability utilization both fell in April; however, it continues to be around encouraging levels. Strong profitability augurs well for growth of employment, whereas spare capacity is getting worn out in terms of trend, added ANZ.
April’s business sentiment and conditions data implies that business environment is upbeat currently, according to ANZ. This, along with the strong labor market, adds to the central bank’s dilemma in its upcoming meeting. The RBA is likely to keep the cash rate unchanged, added ANZ. Strong employment outcomes and business sector imply that demand is in the correct path.
