NAB survey shows business conditions resilient, confidence still low

The news: Business conditions remain resilient despite weaker economic expectations for this year, according to NAB's latest monthly business survey. Business confidence has improved but remains low.

The numbers: The survey showed business conditions eased one index point to +10 in July, while trading conditions, employment and profitability all held steady at above average levels. Confidence lifted by 2 index points to +2. Labour cost growth lifted to 3.7% in quarterly equivalent terms (up from 2.3% in June), likely on the back of wage and award rises taking effect on 1 July. Purchase cost growth was up 2.6%, which NAB said possibly reflected a lift in energy prices.

The context: While Australian economic growth is expected to continue to cool in 2023, the International Monetary Fund expects it to outperform other advanced economies. NAB economists said upside inflationary pressures were still considerable, despite lower CPI figures recorded in the second quarter of 2023.