Business in 'stunning' mood pre-budget
Businesses are heading into the federal budget in an upbeat mood with both confidence and conditions reaching record highs in April.
Retail spending figures released by the Australian Bureau of Statistics also showed a solid 1.3 per cent increase in March, only a touch below the 1.4 per cent reported in earlier preliminary figures.
However, sales fell 0.5 per cent over the March quarter, following a 2.4 per cent increase in the previous quarter.
Ben James from the ABS said the quarterly fall was driven by household spending patterns gradually returning to pre-pandemic levels.
The influential National Australia Bank monthly business survey showed confidence jumped nine points to a record 26 index points in April.
Conditions also rose eight points to 32 index points, surpassing the record peak seen in March.
“The April survey result is simply stunning,” NAB chief economist Alan Oster said.
All components of the conditions index - trading, profitability and employment - set new highs, while the strength of confidence points to ongoing strength in conditions in the near term.
“It looks like we have moved past the rebound phase of the recovery and are now seeing healthy growth in most of the economy,” Mr Oster said.
It will be music to Treasurer Josh Frydenberg’s ears as he pens his budget speech for Tuesday night.
A new study has found employment and hours worked have held steady despite the removal of key support measures that were in place during the heat of the pandemic.
Both the JobKeeper wage subsidy scheme and JobSeeker coronavirus supplements ended in March.
The survey of more than 3500 adults by the Australian National University found employment stayed at around 60 per cent of the population between January and April 2021.
Matthew Gray from the ANU said there had not been a dramatic decline in employment.
“This is even more impressive given our findings cover the period immediately following the cessation of the JobKeeper scheme and the JobSeeker supplement,” Professor Gray said.
“This is good news for many Australians, the economy and our economic activity, particularly as we look to rebuild in the wake of the COVID recession.”
Treasury had estimated that up to 150,000 people would lose their job as a result of the end of JobKeeper.
However, like the ANU survey, economists are growing confident these jobs can be absorbed by a surprisingly strong rebound in the market.
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