National Australia Bank business survey for August
Business confidence to 10
- from priorr 7
Business conditions 20
- prior 19
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NAB comments from the report:
- “The recent strength in business conditions carried into August,” said NAB Group Chief Economist Alan Oster. “Official data for retail sales in July confirmed spending remained robust, as suggested by the previous survey, and today’s release shows little sign that August was much different. Conditions are strong across most industries other than construction, where profitability remains a challenge.”
“Confidence rose again in August, as did other forward indicators in the survey,” said Mr Oster. “Confidence took a hit around June as interest rates first began to rise but it seems that firms’ initial concerns about the impact have eased and a more positive outlook is prevailing, at least for the time being.”
“Capacity utilisation remains at near-record highs in the history of the survey, reflecting that businesses continue to operate near their limits,” said Mr Oster.
“Cost growth moderated somewhat in August, likely reflecting a range of factors including some easing in commodity prices and, possibly, the passing of the one-off effects of July’s minimum wage change,” said Mr Oster. “Still, growth in purchase costs and labour costs remains very strong.”
“In terms of prices, there was little change with retail prices growing at a very rapid 3.3% in quarterly terms,” said Mr Oster. “Recreation & personal services price growth was also unchanged at a very strong 2%. This suggests firms are continuing to pass through price increases to consumers, setting up another strong inflation result for Q3.”
“Overall, the survey indicates that demand remained strong through August,” said Mr Oster. “We continue to expect that inflation and rising interest rates will eventually begin to weigh on household budgets more materially, slowing the pace of consumption growth and, in turn, helping to ease inflationary pressure. So far, however, it appears this dynamic is yet to take hold.”
