SYDNEY (Reuters) – Australia's business conditions softened further in January due to a slowdown in the services sector, a survey showed on Tuesday, while price pressures that cooled the previous month rose again.
National Australia Bank (NAB) research shows business conditions fell two points in January to +6, slightly below the long-term average of +7.
The index of business confidence added 1 point to +1, following a 7 point recovery in December.
Alan Oster, chief economist at NAB, said: “Confidence will remain weak for some time, consistent with continued pressures on the economy as a whole, with growth clearly slowing in the second half of 2023 and cost growth remaining high. It remains equally weak.”
The survey's measure of business sales fell by 3 points to +11, while profitability and employment both fell by 2 points to +5. Capacity utilization increased from 82.8% to 83.6%.
Quarterly purchasing cost growth rose slightly to 1.8% in January, while retail price growth rebounded to +0.9% from +0.5% in December.
“Price pressures remain firm despite the continued moderation in activity indicators,” Oster said. “However, they typically lag economic activity and we expect continued easing of price pressures across the economy in early 2024.”
The Reserve Bank of Australia (RBA) has raised interest rates to a 12-year peak of 4.35% in a bid to curb inflation and continues to warn that further rate hikes may be necessary even as the economy slows. There is.
(Reporting by Wayne Cole; Editing by Stephen Coates)
