Business confidence has hit a one-year high in October led by Victoria off the back of easing restrictions and declining Covid-19 cases.
During the month business confidence rose 9 points to +5 on NAB’s monthly business confidence scale, the highest level since mid-2019.
However, while Victorian businesses saw a strong increase in confidence, as well as those in New South Wales, other states didn’t fare as well. According to the survey, South Australia, Queensland and Western Australia all saw notable decreases.
“Business confidence saw a marginal improvement in the month. Trading conditions and profitability continue to improve as the economy opens up,” said NAB chief economist Alan Oster.
“But employment continues to lag and is still negative, suggesting at face value there has been ongoing job shedding.”
The retail industry has been a strong performer, according to Oster, despite deterioration in the labour market, which is most likely thanks to the strong income support afforded by the government’s JobKeeper program.
NAB also noted that, despite the negative shock to the economy, the Covid-19 pandemic has had also led to increases in consumer spending on goods which pushed retail industry conditions from the worst performing in the survey to the best.