Australia's Business confidence and conditions dip in April, but remain solid

Data released early on Monday showed that Australia's Business conditions eased in April to +9.2 from a reading of +11.8 in the previous month. The same is true for business confidence which came in at +5.1. slightly lower compared to +6.2 in March. Despite retreating from last month’s peaks, Australia's business conditions and confidence remain around elevated levels and continue to suggest that the business environment is positive at present.

The details of the report support the solid headline results. Both profitability and capacity utilisation dipped in the month, but remain around encouraging levels. Solid reported profitability continues to bode well for employment growth, while spare capacity continues to be eroded in trend terms.

"The positive business environment exacerbates the dilemma for the RBA at tomorrow’s meeting. A strong business sector and solid employment outcomes suggest that demand is heading in the right direction. Data adds to the dilemma facing the RBA for tomorrow’s meeting. On balance, we expect the cash rate to remain on hold." said ANZ Research in a report.