Survey scores business profitability high

The combination of an increase in sales and profits in recent times is behind the latest National Australia Bank (NAB) survey that indicates business conditions are improving.

The monthly survey analysed the responses of over 400 local firms to gauge their confidence in the market. Although the recent federal budget did little for consumers, its influence is beginning to wear off – making profitability viable again.

According to NAB, business confidence increased to +8 in June, up from +7 in May. As well as this, business conditions entered positive territory for the first time since January, up 3 points to +2.

It appears that this could be the time for businesses to establish themselves in the marketplace or make investments for future growth as well. Business profitability soared from a disappointing -3 to +3 and sales increased significantly from just +2 in May to +7.

NAB's Chief Economist Alan Oster explained the unexpected lift in business confidence indicates enterprises are working hard behind the scenes on their profitability.

"Business conditions rose in the month to their highest level since January, ending the downward trend that emerged since the start of the year," he said.

Stronger sales are contributing to elevated confidence levels, with the survey suggesting this has encouraged firms to invest and rebuild their inventories.

The survey revealed that business conditions across most industries is improving. However, one area that will need improvement is recruitment. This area dropped 3 points to -3, blamed on particular sectors such as mining and wholesale.

As recruitment and talent retention plays such a critical role in the long term success of a business, now would be the perfect time to put systems in place. Using sufficient recruitment software, businesses can streamline services and match the best person to a job opening.