SYDNEY, (Reuters) – Australian business conditions have improved in November after coronavirus restrictions in Sydney and Melbourne were relaxed. A notable increase in employment is a sign of a quick recovery.

The Tuesday survey by National Australia Bank (OTC) (NAB), showed that its index of business conditions increased 2 points to +12 in November, which is comfortably higher than its long-term average.

This was due to a five-point jump in employment, which reached an historic high +11; the index of sales rose 1 point to +16, and profitability remained at +8.

Although the survey’s confidence index fell 8 points to +12 in December, it was a continuation of an 11-point increase the previous month and remains well above its long-term average.

Alan Oster, chief economist at NAB said that overall these results indicated a strong recovery.

“There is still scope for things to improve further in coming months, particularly in recreation & personal services which was still in negative territory in November despite many restrictions easing in the month.”

The report by firms also indicated a significant increase in their capacity utilization to 83.2%. This suggests that they need to invest more to grow output. However, the forward orders index remains strong at +14.

Inflation was evident in this survey, with both producer and retail prices rising. However, labour costs rose because of the substantial increase in employment.