Business conditions and outlook weaker in November: NAB

The news: Business confidence and conditions both slipped in November and high capacity utilisation is keeping the pressure on price growth, according to NAB's Monthly Business Survey.

The numbers: Business conditions fell 4 points to +9 index points and are at their lowest since early 2022, but they remain above the long-run average. Business confidence fell 6 points to -9 index points, led by a 16 point fall in retail. It was the second monthly decline in business confidence and marks the lowest value since 2012, excluding the pandemic period.

The context: The high-interest, high-inflation environment has been stretching budgets in Australian homes and industries. While the Reserve Bank's rate hiking cycle has helped bring inflation down from the cycle peak of 8.4% a year ago, high capacity utilisation is continuing to be reflected in higher input and output costs, NAB economists said.

What they said: "Both confidence and conditions declined in the month and after a period of relative stability through mid-2023 appear to be softening further," said NAB chief economist Alan Oster.