SYDNEY (Reuters) -A measure of Australian business conditions picked up in October as firms reported better sales and profits, while gauges of costs and prices eased back further and looked to be well-behaved.
The survey from National Australia Bank showed its index of business conditions rose one point to +9 in October, the highest level since March 2024. A business confidence index fell one point to +6, still above the long-run average.
"Overall, the positive trend in business conditions suggests the economy has held onto the momentum gained since late 2024,” said NAB Chief Economist Sally Auld.
"Economic growth has improved but we are starting at a point with little slack in the economy. Capacity utilisation is still high and wage and margin pressures continue to be significant factors impacting business confidence."
DETAILS
* The survey's measure of business sales jumped by fivepoints to +19 in October, while profitability rose 3 points to+9. The measure of employment held steady at +3. * Price indicators in the survey all eased back in the monthwith purchase costs running at a quarterly rate of 1% and labourcosts at 1.5%. * However, the capital utilisation rate ticked up to 83.4,from 83.3, suggesting the level of activity remains high.KEY CONTEXT
* The Reserve Bank of Australia held interest rates at 3.6%earlier this month, saying it was cautious about easing furthergiven higher inflation, firmer consumer demand and a revival inthe housing market. * RBA Deputy Governor Andrew Hauser on Monday noted the highcapital utilisation rate in the economy as markets trimmed thechance of one last rate cut in May to just 66%. * Australia’s consumer mood turned positive for the firsttime in nearly four years in November, a private sector surveyshowed on Tuesday.(Reporting by Stella Qiu; Editing by Sonali Paul)
