SYDNEY (Reuters) - A measure of Australian business conditions fell sharply in August reflecting weakness in employment, sales and profitability as Victoria relapsed into a coronavirus lockdown, and though confidence rose it still remained fragile.
National Australia Bank's (AX:NAB) index of business conditions slipped 6 points to -6 from 0 in July.
That was still higher than a low of -34 in April at the height of the pandemic though nowhere close to the long-run average of +6.
The survey's measure of business confidence did rise but stayed in negative territory. It climbed to -8 from -14 in July.
The index of sales slipped to -2 from +1, and profitability to -3 from +1. Employment stumbled to -13, from -2 in July.
The decline in conditions was broad-based across states except for New South Wales of which Sydney is the capital city.
"Uncertainty around the virus and the global economy remains high, as does the path to a reopening domestically," said NAB Group Chief Economist Alan Oster.
"The impact of the Melbourne stage 4 restrictions on activity is evident in Victoria with a decline in conditions – though not as bad as feared," he added.
"The fact that the other states have seen a pull-back suggests that the virus continues to pose a risk everywhere, not just states with significant containment measures in place."
The pandemic has wreaked havoc on two of Australia's most lucrative sectors, tourism and education, with the country in its deepest downturn since the Great Depression of the 1930s.
In response, the Reserve Bank of Australia (RBA) 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$300 billion in fiscal stimulus.