REPEAT: MNI: Australia Biz Survey Upside Risk For RBA MonPol

Repeats Story Initially Transmitted at 01:36 GMT May 7/21:36 EST May 6

--NAB Survey Shows Business Conditions At Equal Highest On Record

By Sophia Rodrigues

     SYDNEY (MNI) - The National Australia Bank's business survey for April

showed a rise in employment and capacity utilization, which together with an

equal record high on business conditions, point to solid growth in employment.

     This would help the unemployment rate slowly edge lower, and could lead to

some acceleration in wage growth and thus help inflation reach the mid-point of

the target band. The data thus poses upside risk to the Reserve Bank of

Australia's monetary policy.

     Data published by NAB Monday showed business conditions more than reversed

the fall in March to be up 6 points to +21 and reached its equal highest level

since the survey began in March 1997. Conditions were strongest in mining,

followed by finance, business and property. Conditions were weakest in the

retail sector which turned negative for the first time this year.

     The data showed employment sub-index rose 4 points to +13, and in trend

terms was at the highest level since the survey began. Both NAB's monthly and

quarterly business surveys point to robust jobs growth ahead. NAB is also

pointing to rise in capacity utilization which also suggest employment will

continue to grow strongly and the unemployment rate will move lower in time.

     According to NAB, the data signals jobs growth of around 24,000 per month,

and suggests the recent softening in employment growth in the official labor

force survey may be temporary.

     Inflation measures picked up in April except purchase costs which slowed to

+0.5% quarterly rate compared with +0.9% in March. Retail prices turned

positive, labor costs accelerated slightly and final products prices rose

further.

     One important negative in the data was a fall in retail conditions into

negative, though in trend terms it remained positive. But offsetting this was a

large increase in conditions in personal and recreational services which has

resulted in reversal of the softening conditions that had emerged from late last

year.

     Meanwhile, business confidence rose 2 points to +10, and remained well

above historical average of +6 points. Confidence on a trend basis was strongest

in mining and construction.

     Below is the table from the survey:

                                           April  March

-------------------------------------------------------

Business Confidence                          +10     +8

Business Conditions                          +21    +15

Employment                                   +13     +9

Profitability                                +22    +16

Trading                                      +28    +21

Exports                                       +3     +3

Forward Orders                                +4     +5

Stocks                                        +2     +5

Retail Prices (quarterly rate %)            +0.2   -0.1

Labor costs (quarterly rate %)              +1.0   +0.8

Final products prices (quarterly rate %)    +0.4   +0.3

Capacity Utilization (%)                    82.5   82.3

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

[TOPICS: MTABLE]