Breaking News
Investing Pro 0
Free Webinar - Unlock Divergence Trading: Learn from Seth Julian MBA | TThursday, March 23, 2023 | 10:00AM PST Enroll Now

Australian Dec business conditions moderate, cost pressures ease - survey

Economic Indicators Jan 23, 2023 08:45PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: The Central Business District (CBD) skyline is pictured at sunset in Sydney, Australia, June 4, 2021. REUTERS/Loren Elliott
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

SYDNEY (Reuters) - Australian businesses conditions moderated for a third straight month in December, while price pressures began to ease, pointing to a likely peak in inflation, according to a business survey issued on Tuesday.

The results may reduce pressure on the Reserve Bank of Australia to increase interest rates at its next policy-setting meeting, on Jan. 31.

The survey from National Australia Bank (OTC:NABZY) Ltd (NAB) showed its index of business conditions had fallen 8 points to +12 in December, although it remained still well above its long-run average.

The measure of confidence, on the other hand, improved 3 points to -1, remaining in negative territory for a second straight month.

"Overall, the survey continues to point to a healthy level of activity with above average conditions and elevated capacity utilisation but a slowing in momentum with most indicators pulling back over the past three months or so," NAB said in a statement.

"With confidence still in negative territory and well below average, and forward orders moderating further in the month, there are signs that conditions may ease further."

The survey showed inflation easing across the board. The RBA's board will consider whether to raise its policy interest rate for a ninth time at its next meeting.

Labour costs in the three months to December were 2% higher than in the three months to September. This showed a moderation in wage inflation, because in the September-November period labour costs had been 2.8% higher than three months earlier.

Purchase cost inflation also slowed in the same periods, to 2.5% from 3.9%, while growth in final product prices eased to 1.5% from 2.0%.

So far, markets are still inclined to think the central bank will raise its 3.1% cash rate by another quarter point, but they have also priced in a 40% chance it will pause, given that interest rates have climbed by 300 basis points since May.

A consumer inflation report due on Wednesday is expected to be critical in determining the near-term outlook for interest rates.

Economists polled by Reuters expect the report to show that October-December quarter consumer prices were 7.5% higher than a year earlier, compared with the 7.3% annual rise seen in the previous quarter. That will still be below the forecast from the RBA for a peak inflation rate of around 8%.

Other signs of a slowdown in business conditions include NAB's measure of sales, which slipped 9 points to a however still strong reading of +18 and above pre-pandemic levels.

Profitability edged 7 points lower to +12, while the employment index also dipped 5 points to +8, still high from a historical perspective.

Capacity utilisation also eased off from record high levels to 83.7%.

"A key theme of 2023 will be just how quickly inflation moderates after peaking in late 2022 - and ultimately whether the RBA has done enough to bring inflation back to target," said NAB.

"We continue to expect inflation to track lower across 2023 and 2024, returning to around the top of the target band in late 2024."

Australian Dec business conditions moderate, cost pressures ease - survey

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email