SYDNEY: A measure of Australian business conditions picked up sharply in March as firms saw strong sales and labour conditions, while surging costs pushed retail prices higher in a worrying sign for inflation.

       Yesterday’s survey from National Australia Bank (NAB) showed its index of business conditions doubled to positive 18 in March, while confidence added three points to positive 16.

       The upbeat result will likely be welcomed by Prime Minister Scott Morrison, who is in the middle of a tough election campaign.

       The survey’s measure of sales jumped 13 points to positive 24, while profitability rose eight points to positive 13. The employment index added four points to positive 12, suggesting the jobless rate will soon drop under 4% for the first time since the early 1970s.

       “The improvement was largely driven by the retail sector, which saw conditions rise 23 points, as well as recreation and personal services and finance, business and property,” said NAB chief economist Alan Oster.

       “Confidence jumped in the transport, construction, and recreation and personal services sectors.”

       Measures of forward orders and business investment also picked up, suggesting the recovery would continue.

       Inflation remained a headache with purchase costs and labour costs rising at the fastest pace in the history of the survey, which in turn pushed up retail prices. — Reuters