National Australia Bank
A National Australia Bank (NAB) logo is pictured on an automated teller machine (ATM) in central Sydney September 12, 2014. Reuters/David Gray

Australian business conditions rose to the highest level in ten years, according to the new National Australia Bank (NAB) monthly business survey. Over 400 firms showed business conditions climbed 2 points to +14 last month.

The survey also shows that business confidence rose more than double to +13 from +6 in March. It was the highest level recorded in seven years.

NAB Chief Economist Alan Oster said the survey points to a continuing improvement in employment conditions, which he described as a trend that is pivotal to the likely path of the Reserve Bank of Australia’s cash rate.

Based on the survey, employment data was a major driver behind most of the improvements in conditions. Oster said the latest progress in employment growth reported by the ABS helped lessen the gap that had surfaced with NAB’s employment conditions index over several months.

He added that the latest surge in the conditions index was primarily because of the resilience of the Queensland economy after Cyclone Debbie, which has been better than expected. He also mentioned about uniform pick-up across large industries as culprit, with services on top of the charge.

As for industry trends, Oster said they are positive and are supported by elevated commodity prices. “Consequently, we remain confident in our outlook for economic growth to accelerate in the second half of 2017,” he said per the Business Insider.

NAB’s forecast for the Australian economy is still upbeat, with some notable exceptions in the sights of policymakers. The Reserve bank of Australia (RBA) previously predicted a stable growth for the domestic economy in the year ahead.

The country’s economy is expected to grow more than 3 percent this year. A better economy will likely feed into stronger business optimism in the future.

Federal Budget 2017

NBA is set to report on broader business conditions in this week’s report, which is slated to be released along with the monthly retail sales data. The Australian government will also publicise its budget, which is expected to have significant implications on the larger market.

Prime Minister Malcolm Turnbull pledged that his government's second budget will help Australians "realise their dreams.” His slogan that goes with that promise has three words: fairness, opportunity and security.

The prime minister said his administration is committed to supporting the Australian manufacturing sector. Turnbull has just returned to the country after his first meeting with United States President Donald Trump.

The Sydney Morning Herald/YouTube

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