Australian businesses have defied wild volatility in global financial markets and become steadily more upbeat on the outlook for the economy and investment, a survey reported. National Australia Bank's quarterly survey of businesses confirmed the momentum seen in its monthly reports as respondents revised up expectations for the next 12 months.
"We find it encouraging to see that firms are continuing to look past all the 'noise' in financial markets to focus on what is going on at home," said NAB chief economist Alan Oster. "Firms are actually telling us that they not only remain quite upbeat about the outlook, but they have revised up their expectations relative to last quarter."
The survey's index of business conditions over the next three months rose 2 points to 15, while the outlook for the coming 12 months also added 2 points to a strong 26. An increase in capacity utilisation and capex plans for the next year suggested a more positive outlook for non-mining business investment, while stronger employment intentions point to further improvement in the labour market, said Oster. The Reserve Bank of Australia (RBA) has long been hoping for a revival in non-mining investment to offset cutbacks in the hard-hit resources sector.
The survey found consumer prices remained subdued across the economy, with 67 percent of respondents expecting inflation to remain below 3 percent. The official measure of consumer price inflation is due next week and is likely to show inflation stayed just under 2 percent in the first quarter.