Australian business confidence rose in November as profits and sales improved, suggesting growth will rebound from its slowest pace in a year.
The business sentiment index gained three points to a reading of 8, seasonally adjusted, according to a survey of about 400 companies by National Australia Bank, released yesterday
in Melbourne. A reading above zero signals companies expecting their industry to improve outnumber those predicting a deterioration.
Stronger investment from companies such as BHP Billiton and Santos plus the second-highest exports on record in October may boost the economy, which grew 0.2 per cent in the three months ended September 30 from the second quarter. Reports this month have shown retail sales, employment and borrowing for homes have gained.
"The results don't support the view of a stalled economy," Alan Oster, chief economist at National Australia Bank, said in Melbourne. "It suggests the economy may be plateauing at a reasonable growth rate."
Australia's business conditions index, which measures sales, profits and hiring for companies in November, gained 5 points to a reading of 11, according to seasonally adjusted figures. A reading higher than zero means more companies say business was good last month than those saying it was poor.
The index measuring profitability in November rose 8 points to a reading of 10. The sales index gained 7 points to 17. The employment index increased 1 point to 7.
"The results were very much driven by higher levels of trading and profitability," Oster said.
Australian company profits rose a greater-than-expected 3.9 per cent in the three months ended September 30 as incomes gained at exporters such as miners BHP and Rio Tinto and at Santos, Australia's biggest natural gas producer.
- BLOOMBERG
