Australia NAB Business Conditions Fall; Confidence Improves
(RTTNews) - Australia's business conditions declined in January, while confidence improved with broad-based increases across industries, survey data from NAB showed on Tuesday.
The business conditions index dropped to 3 from 6 in December. Meanwhile, the business confidence index advanced to 4 from -2 in the previous month.
These moves saw confidence and conditions converge in the month, after an extended period of divergence over the past two years, NAB said.
The trading and profitability sub-components of the conditions index deteriorated 3 points and 6 points, respectively. By contrast, employment edged up 1 point.
The capacity utilization rate fell to 82.0 percent from 82.7 percent. Forward orders eased by one point to -3 index points, while capex slid 7 points to +4, the survey showed.
Regarding prices, the survey revealed that purchase cost growth softened to 1.1 percent in quarterly equivalent terms. On the other hand, labor cost growth edged up to 1.8 percent.
Product price growth was unchanged at 0.8 percent and retail price inflation moved up slightly to 0.9 percent.
It is unclear whether this pick-up in confidence will be sustained, NAB Chief Economist Alan Oster.
"Cost pressures remain elevated for businesses and are not being fully passed onto consumers, which may be weighing on profitability and therefore overall business conditions," Oster added.
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