SYDNEY (Reuters) - A measure of Australian business conditions hit its highest since early 2008 in July as sales and profits stayed strong, while firms turned more confident the purple patch would last for some time yet.


National Australia Bank surveyed more than 400 firms to compile its index of business conditions which rose 1 point to +15 in July, triple its long-run average of +5.


After lagging behind, the survey's measure of business confidence jumped 4 points to +12 and back to levels seen before the global financial crisis.


The run of upbeat surveys holds out hope for a bounce in economic activity after bad weather kept growth to just 0.3 percent in the first quarter.


The Reserve Bank of Australia (RBA) argued at a policy meeting last week that growth would revive and held interest rates steady at 1.5 percent


The survey's measure of sales edged back a point in July to a still strong +20, while business profits rose another 4 points to +18. Its measure of employment held firm at +7, again above average.

NAB said that outcome was consistent with annual job creation of around 240,000, or around 20,000 per month, and was enough to nudge the unemployment rate lower from the current level of 5.5 percent.

"The persistent strength in employment conditions has made us a little more optimistic about the near-term outlook for the labor market," said NAB group chief economist Alan Oster.

"While that will be a welcome sign for the RBA, signs of inflation pressures remain elusive," he added. "Price and wage measures in the survey generally weakened again in the month, partly a reflection of elevated rates of underemployment."

The quarterly pace of growth in labor and purchase costs, and for final product prices all slowed in July. Retail prices actually slipped by 0.1 percent, underlining the intense competitive pressure in the sector.

(Reporting by Wayne Cole; Editing by Eric Meijer)