Australia June business conditions steady in sign of resilience
AUSTRALIAN business conditions steadied at above average levels in June as sales and employment proved resilient, while firms reported an easing in capacity constraints even as costs ticked higher.
The survey from National Australia Bank (NAB) released on Tuesday (Jul 11) showed its index of business conditions held at +9, after dropping six points in May. The volatile measure of confidence bounced by three points to 0.
The survey’s measure of sales dipped a point to a still-strong +14 in June, while the employment index stayed at +5 and profits rose two points to +9. Forward orders, a leading indicator of demand, rose three points to -2.
“Business conditions have eased notably since January but remain above their long run average, a sign of ongoing resilience,” said NAB chief economist Alan Oster.
“We continue to see warning signs in the survey about the outlook for growth but as of June firms were yet to see a real deterioration.”
Labour costs jumped to 2.6 per cent in quarterly terms, possibly reflecting firms factoring in minimum and award wage increases, while input cost growth remained at 2.3 per cent.
Growth in producer prices eased to 1.1 per cent in the quarter, while retail price growth picked up to 1.6 per cent.
In a sign of easing supply chain pressures, the survey’s measure of capacity utilisation fell to its lowest since early last year at 83.5 per cent.
The Reserve Bank of Australia skipped a chance to hike interest rates this month as it waits to see if past increases are finally working to restrain inflation. REUTERS
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