As Covid-19 restrictions began to relax and the economy slowly reopened, business confidence and conditions rebounded due to improved terms of trade and profitability. The Reserve Bank of Australia’s closely watched National Bank Business Survey recently revealed that although business conditions remained negative, they jumped 10 points in May after falling to the level of the financial crisis in April. Although confidence is still in the negative range, it has jumped 25% from April.
The survey also recorded an improvement in the employment index, which measures companies’ willingness to hire. The index rose by 3%. Terms of trade improved by 13 points and profitability by 16 points. Forward orders improved slightly, but were still lower than the lows during the 1990s recession.
On Tuesday, Finance Minister Josh Frydenberg extended the time limit for one-off asset write-offs for companies with an annual income of less than A$500 million. The Australian Food and Grocery Association welcomed this policy. In a trade update released on Tuesday, Bunnings’ half-year sales so far have increased by 19.2% as customers use the blockade period to decorate their homes and gardens. On the same day, ANZ’s job advertisement survey found that the unprecedented job advertisements in March and April fell 58% in May, and the average number of advertisements per month increased by 0.5%. Weekly changes in numbers bring more hope, and the number of job advertisements increased steadily in May.
https://www.afr.com/policy/economy/business-activity-sees-big-bounce-in-may-20200609-p550rz