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Australia’s business conditions rose to a record high in May, while business sentiment weakened moderately from the previous month, survey results from National Australia Bank showed on Tuesday.

The business conditions index climbed to 37 in May from 32 in the prior month. Meanwhile, the business confidence indicator came in at 20 in May, down from a record high of 23 in the previous month.

The survey showed that the employment, profitability and trading sub-components all reset last month’s highs – with trading conditions at exceptional levels. Forward orders also remained at a record level.

The survey measure of reported capex rose further suggesting that the strong rise over 2021 is more than just a rebound from disruptions to activity and uncertainty during 2020. Overall, this was another very strong read for the business sector – and forward indicators point to ongoing strength in the near-term, NAB Group Chief Economist, Alan Oster, said. This is a pleasing result coming after last week’s national accounts which showed that the economy has now surpassed its pre-COVID level. The economy now appears to be entering a new period of growth after a very rapid rebound, Oster added.

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