Australia NAB Business Conditions Recover In December

(RTTNews) - Australia's business conditions rebounded in December with retail entering positive territory for the first time since November 2023, a survey from the National Australia Bank showed on Tuesday.

The business conditions index rose three points to +6 and almost returned to the long-run average.

The survey showed a notable uplift in retail conditions which entered positive territory for the first time since November 2023.

NAB Chief Economist Alan Oster said conditions remained strongest in services sectors. The improvement in retail conditions may reflect a pick-up in consumer spending at the end of 2024.

"We will have to wait and see whether this improvement is sustained over 2025," said Oster.

The business confidence index gained one point to -2 in December but remained well below average levels.

Forward orders climbed three points as there were notable increases in mining and retail orders but both remained the weakest of all industries in trend terms, the survey showed.

Capacity utilization advanced to 82.8 percent in December and remained well above its long-run average of 81.3 percent. Capex was largely unchanged in December.

Regarding prices, the survey showed purchase cost growth was slightly higher in December, edging up to 1.5 percent in quarterly equivalent terms. Labor cost growth was lower at 1.4 percent.

At the same time, output price growth ticked up by 0.3 percentage points to 0.9 percent. Retail prices edged up slightly to 0.7 percent.

"The uptick in purchase cost growth and final product prices remind us that businesses continue to face some price pressures," Oster added.