A measure of Australian business conditions showed a broad-based improvement in activity and confidence in May as the economy began to emerge from coronavirus lockdowns, though the survey results were still in recessionary territory overall.
National Australia Bank's <NAB.AX> index of business conditions bounced to -24 in May from -34 in April. That was still far below the long-run average of +6 and similar to depths seen during the global financial crisis.
The survey's measure of business confidence picked up to -20 from -46 in April, but again remains below the long-run average.
The index of sales firmed to -18, from -31, and profitability to -19 from -35. Employment, however, improved only a little to -31.
"Conditions rose in the month, but they are still negative and this tells us activity was still extremely weak in May," said NAB Group Chief Economist Alan Oster.
"While some coronavirus containment measures have eased, there are still restrictions in place and the services sectors which are most impacted by these measures continue to show the weakest conditions."
Official data out last week showed the economy had already contracted in the March quarter ahead of what is expected to be a sharp downturn this quarter, leading the government to concede the country had entered its first recession since 1991.
The pandemic has wreaked havoc on two of Australia's most lucrative sectors - tourism and education - with the Reserve Bank of Australia (RBA) warning economic output could contract by 10% over the first half of the year.
The central bank has chopped interest rates to an all-time low of 0.25% and launched a major campaign of bond-buying to hold yields down.
The Australian government has pledged over A$160 billion ($112.29 billion) in fiscal stimulus, including billions for an employee subsidy that has helped limit job cuts in hard hit sectors.
(Reporting by Wayne Cole; Editing by Sam Holmes)
