SYDNEY (Reuters) - A measure of Australian business conditions showed a sharp recovery in activity and confidence in June as much of the economy reopened from coronavirus lockdowns, though a fresh outbreak in Melbourne threatens to darken the mood once more.
National Australia Bank's (AX:NAB) index of business conditions bounced to -7 in June, from -24 in May and -34 in April. That was a lot nearer to the long-run average of +6 and away from lows seen during the global financial crisis.
The survey's measure of business confidence picked up to +1 in June, from -20 in May and -46 in April.
The index of sales firmed to -7, from -19, and profitability to -8 from -19. Employment improved to -11, from -31 in May.
"Business confidence turned positive after rebounding sharply from record lows over the past 3 months," NAB Group Chief Economist Alan Oster said.
"Nonetheless, while the rebound has been significant, conditions remain deeply negative and well below average – reflecting the fact that activity still has some way to go before a full recovery can be declared."
Mining and retail led the gains, with services still lagging due to social distancing requirements and a lack of tourists.
"The survey was conducted just prior to the reintroduction of lockdowns in Victoria – so we will be closely watching next month's survey to see how confidence and conditions are again impacted," cautioned Oster.
The entire city of Melbourne has been told to stay at home as much as possible amid a fresh virus outbreak.
The pandemic has already wreaked havoc on two of Australia's most lucrative sectors, tourism and education, with the Reserve Bank of Australia warning economic output could contract by 10% over the first half of 2020.
The central bank has chopped interest rates to an all-time low of 0.25% and launched a major bond-buying campaign to hold yields down, while the government has pledged over A$160 billion (£88.45 billion) in fiscal stimulus.