Business remains resilient amid easing cost growth: NAB
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The news: Business conditions fell slightly in September, but while confidence remains low there are green shoots indicating some relief in price growth, according to a NAB survey.
The numbers: NAB's Monthly Business Survey reported business conditions fell 3 points to +11 points in September, reversing August's gains but remaining above average. Business resilience was reflected in high capacity utilisation and improvement in forward orders. Business confidence was steady at +1 points and has remained below average for several months. Labour cost growth, which spiked 4% in quarterly terms in July fell to 2% in September, and eased from 3.2% to 2% month on month. Overall price growth eased to 1.0%.
The context: While energy and commodity price strength will likely underpin cost-of-living pressures for some time, some of the outlays that add fuel to inflation appear to be easing, NAB economists said.
What they said: "The upcoming Q3 CPI release is still expected to show strong inflation for the quarter as a whole with energy, rents, and a range of services prices likely to contribute strongly,” NAB chief economist Alan Oster said in a release.
"Nonetheless, the September survey results suggest the momentum of some of the key cost pressures driving inflation may have started to step back in a welcome sign for the broader inflation outlook."
The source: NAB Survey
