Businesses uncertain despite resilient conditions: NAB
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The news: Australian business confidence remains low despite improving business conditions, according to NAB's Monthly Business Survey. Price growth is easing, the bank says, but domestic demand is underpinning a lengthy tussle with inflation.
The numbers: Business conditions rose one point to +13 index points, trading conditions rose two points to +20 index points and profitability was up three points to +12 index points. Business confidence fell three points to -2 index points, with decreases across most industries. Only transport and utilities, construction and manufacturing remain in positive territory in trend terms. Price and cost growth eased during the month
The context: Forward orders remain soft, with new signs of weakness in wholesale and manufacturing, NAB chief economist Alan Oster said. Capacity utilisation remained above average despite a downtick this month. Price and cost growth slowed in October, with overall price growth easing to 1%, the slowest rate since July 2020.
What they said: “The Q3 CPI showed inflation had been persistent through the middle of the year and the survey suggests this remained the case heading into Q4,” Oster said.
“We still expect to see gradual moderation over time but it will be a protracted process, especially given the resilience of domestic demand thus far."
The source: NAB Monthly Business Survey
