SYDNEY: Australian business conditions eased in April as profitability weakened, forward orders slipped and firms’ spending plans took a hit, boosting the case for the Reserve Bank of Australia (RBA) to cut interest rates to support the economy.
Business conditions, which measure sales, profitability and employment, slid last month, National Australia Bank Ltd (NAB) said in a report yesterday.
Capacity utilisation fell to 81.4%, returning to its long-run average for the first time since mid-2021.
Furthermore, a separate Westpac Banking Corp report showed consumer confidence rose 2.2% to 92.1 points in May as households increasingly expect a rate cut next week.
The result still means pessimists outweigh optimists with the dividing line 100.
“Overall, both business conditions and confidence remain weak relative to average levels,” said Sally Auld, chief economist at NAB. — Bloomberg
