Firms in record shape pre-JobKeeper demise

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)


Australian businesses have taken the end of the successful JobKeeper program in their stride for now, while consumers appear happier they can take a break in New Zealand than worrying about the vaccine rollout.

Businesses enjoyed their best performance on record during March, with strong forward orders pointing to growing activity in coming months.

While the monthly National Australia Bank business survey released on Tuesday also showed a dip in confidence, it remains well above average.

“This in combination with a very strong read for forward orders points to ongoing strength in activity, which hopefully sees conditions remain elevated, even as we pass through the end of the JobKeeper program,” NAB chief economist Alan Oster said.

The NAB business conditions index rose eight points to a record 25 index points, while confidence eased three points to an index of 15.

The end of the JobKeeper wage subsidy last month has raised concerns over what impact it will have on employment.

Treasury has forecast as many as 150,000 people could lose their job without the subsidy.

The weekly ANZ-Roy Morgan consumer confidence index also jumped 5.9 per cent, reaching its highest level since September 2019 and sprinting past its long-run average.

“The receding of the Brisbane lockdown and announcement of the trans-Tasman travel bubble has seen confidence jump sharply,” ANZ head of Australian economics David Plank said.

“The jump has occurred despite the delay in the COVID-19 vaccine rollout.”

The confidence survey, conducted at the weekend, would have captured last week’s decision by the nation’s health authorities to recommend the AstraZeneca vaccine not be given to people aged under 50.

This followed cases abroad of blood-clotting among younger people after having the vaccine. Two such cases have been recorded in Australia.

Prime Minister Scott Morrison has since announced the government will no longer set targets for the remainder of the vaccine rollout, a timetable that was already in tatters.

“Those surveyed appeared to shrug-off concerns about the delayed coronavirus vaccine rollout and JobKeeper wage subsidy expiry,” Commonwealth Securities senior economist Ryan Felsman said.

But he expects as government household stimulus support is reduced, and uncertainty increases around the delayed COVID-19 vaccine rollout, the government will announce a bunch of targeted business policy measures in next month’s budget.

Australian Chamber of Commerce and Industry acting CEO Jenny Lambert still wants to see a vaccine rollout plan to give more certainty and transparency.

“Obviously the government was relying more heavily on the AstraZeneca vaccine, there is obviously a lot of changes they have had to deal with,” she said.

“But the important thing is to engage with key stakeholders, such as business, and to be transparent with the community and start talking about how we can see a path to reopening some of these restrictions.”

New figures from the Australian Bureau of Statistics show payroll jobs rose by 0.8 per cent over the month to March 27, and were up 0.1 per cent in the last fortnight, ahead of JobKeeper ending.

Over the year, payroll jobs were 1.0 per cent higher than pre-pandemic levels.

The data is a prelude to Thursday’s full labour force report, which economists expect to show employment grew by a further 35,000 in March, taking the unemployment rate down to 5.7 per cent from 5.8 per cent.


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