Australia’s business conditions improved on the back of very high trading conditions in September, while sentiment deteriorated notably, data from National Australia Bank showed Tuesday.
The business conditions index rose three points to 25 in September. Meanwhile, the business confidence index halved to 5 from 10 in August.
Conditions remained strong across industries and states, with wholesale and retail rising notably in the month.
The survey showed that trading conditions drove the overall increase, rising by nine points to 38 index points. Profitability and employment were little changed at +19 points and +16 index points, respectively.
At the same time, business confidence deteriorated in a number of industries including retail, wholesale, transport & utilities, recreation & personal, and finance, business & property.
Within leading indicators, forward orders edged up one point to +15 index points. On the other hand, capacity utilization eased but remained historically strong at 85.8 percent.
Cost pressures eased in September with labor cost growth slowing to 3.1 percent in quarterly terms from 3.4 percent in August. Likewise, purchase cost growth eased to 3.8 percent from 4.4 percent in August.
Overall product prices and retail prices grew at slower rates of 2.1 percent and 2.2 percent, respectively.
Overall, the survey indicates the economy has remained resilient through recent months despite the challenges from higher inflation, rising interest rates and a gloomy global outlook, and there are signs that cost pressures may be easing, NAB Chief Economist Alan Oster said.
“That is all good news for the economy and for businesses, at least for the time being,” Oster added.
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