SYDNEY: A measure of Australian business confidence rose to decade highs in February as sales, profits and employment all picked up sharply in a positive sign for a continued economic recovery from last year’s COVID-induced recession.

National Australia Bank’s index of business confidence climbed four points to +16 points in February, levels last seen in 2010. Its measure of conditions rebounded 6 points to +15, almost entirely recouping a pullback in January.

The conditions index was a world away from the trough of -34 hit last April at the height of the coronavirus pandemic and remained well above its long-run average of +6.

“This is a very positive survey result. Business conditions and confidence are both at multi-year highs and, importantly, we’re starting to see an uptrend in business hiring and investment activity,” said NAB chief economist Alan Oster.

“Firms are reporting running above average capacity levels and this tells us the economy is likely to have already recovered pre-virus GDP levels in Q1 2021.”

Conditions were very strong in retail, wholesale, mining and professional services, while construction, personal services and transport conditions lagged.

The survey’s index of sales jumped 8 points to an historically high +21, while profitability rose 4 points to +17 and employment 5 points to +8.

The labour market has recovered far faster than expected in recent months with the jobless rate dropping to 6.4% in January, from a peak of 7.5% last July.

Measures of capacity utilisation and investment firmed to be above their pre-virus levels and their long-run averages.