Business confidence rose to its highest level since mid-2019, led by a large gain in Victoria. This was likely driven by the fall in COVID-19 case numbers and looming end of lockdown in Melbourne. By industry, recreational & personal services and construction saw notable increases. However, while the improvement in confidence is encouraging, the results across other survey variables (and regions) were mixed. While Vic saw a significant improvement in conditions, there were notable declines in SA, Qld and WA.
Trading conditions and profitability drove the marginal improvement in conditions, but the employment index remains weak at -5 index points, suggesting the labour market is lagging the recovery in activity.
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Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
