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Australia business conditions soften further in Nov: survey
[SYDNEY] Australian business conditions softened in November for a second month as tough times in the retail industry weighed on sales and profits, a survey showed on Tuesday, though a measure of confidence actually improved.
National Australia Bank's monthly survey of more than 500 firms showed its index of business conditions dipped 2 points to +5 in November, after easing to +7 in October.
The drop took the index back to its long-run average for the first time since April 2015.
The survey's measure of business confidence proved more resilient, rising a point to +5 in November, and was positive across all industry groups.
Conditions in the retail sector were reported to be particularly difficult, even though official data on retail sales have shown three months of solid increases.
Retailers were again unable to raise prices over the three months to November despite higher costs, reflecting intense competition in the industry.
Wage growth was also very subdued, implying a continued lack of inflationary pressure in the economy.
"We are becoming increasingly concerned about the underlying momentum in the economy as evidence mounts that the non-mining economy is losing steam," said NAB chief economist, Alan Oster, who has had a bearish outlook for some time.
Government figures out last week showed the economy shrank 0.5 per cent in the third quarter, the first contraction since early 2011, with business investment again very weak.
Mr Oster said growth was likely to bounce back this quarter but remain subdued enough next year to push the Reserve Bank of Australia (RBA) into cutting interest rates again.
The central bank has recently been optimistic on the outlook and played down the need for further easing, having already cut rates in August and May.