In July, Australian business conditions showed signs of improvement, driven by a rebound in employment, according to a survey by the National Australia Bank (NAB). The survey revealed that the index of business conditions rose by 2 points to +6, just below its long-term average. However, the more volatile business confidence index dipped by 2 points to +1, reflecting some uncertainty.
Employment Rebounds as Cost Pressures Ease
The employment index experienced a notable recovery, jumping from 0 to +7, indicating ongoing job growth in the economy. Meanwhile, sales eased slightly, dropping to +9 from +11. NAB Chief Economist Alan Oster expressed relief over the employment figures, suggesting that strong job growth continues to support the economy.
The survey also highlighted a slowdown in cost pressures, with growth in purchase costs and product prices decelerating. Product price inflation remained steady at 0.7% for the quarter, while purchase costs grew by 1.1%, nearing pre-COVID levels.
However, labor costs surged to a quarterly rate of 2.5%, likely due to recent minimum wage increases.
The Reserve Bank of Australia maintained interest rates at 4.35% in August, aiming to balance inflation control with employment growth.
Source Reuters