Australian businesses are still enjoying buoyant trading conditions even though business conditions and confidence levels have slipped back in April, according to NAB’s latest Monthly Business Survey. Its Business Conditions Index fell 3 points from 12 to 9, while the Business Confidence Index fell 1 point from 6 to 5.
NAB’s interpretation of the figures was one of a confirmation of “a continuation of the favourable business environment that has helped to underpin the non-mining recovery”, a view Westpac senior economist Andrew Hanlon shared. He said, “This confirms that the non-mining sectors are benefitted (sic) from low interest rates and a sharply lower currency…Solid business conditions are now evident in manufacturing and transport/utilities.”
Domestic bond markets reacted to the report by sending interest rates slightly higher on the day. Implied yields on 3 year bonds edged higher by 1bp to 1.81% while the 10 year bond futures yield increased by 3bps to 2.55%.