RTTNews - Business confidence in Australia improved in the second quarter, a survey by the Australian Chamber of Commerce and Industry or the ACCI showed Thursday.
The survey revealed that about 23% of firms surveyed expect improvement in general business conditions, while 27% expect a deterioration. More importantly, half of the respondents expect no change in business conditions. In relative terms, the confidence was increasing, the survey said.
At the same time, the activity indicators remained subdued. Although it was stronger than three months ago, the actual net outcomes for demand, output and capital expenditure plans remained negative. Labor market demand was also weak, with firms expecting employment to marginally decrease over the next three months. Net exports softened marginally, but the forward indicator was improving. Inflationary pressures continued to ease but cut into profit margins.
Further, while investment expectations for the next 12 months showed some improvement, the index remained historically weak, the ACCI said. However, the wage growth expectations rose moderately in the second quarter.
Commenting on the latest data, Bill Evans, Managing Director with Westpac Banking Corporation said, This survey is consistent with other surveys on business conditions we have seen recently both for Australia and the U.S. The Actual Composite Index, which provides a guide to the respondent's assessment of current business conditions, has improved from the depths of the March quarter but is still firmly in the contractionary territory. In turn, investment intentions and capacity utilization have improved somewhat but still point to a heavy load of excess capacity.
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