Growth, inflation and labour market all easing
Employment index rises as resilience continues
Business conditions rose 3pts in August, continuing a run of resilience through the middle of the year where conditions have remained well above average despite the broader slowing in the economy. Trading conditions, profitability and employment all rose, with a broad-based uptick in conditions across most industries. Capacity utilisation also rose back above 85%. The confidence and forward orders measures both edged up though they remain below average, weighed down by deep negatives in the retail sector. Car retailing and personal & household goods have been driving this result, in part reflecting normalising order books as backlogs are cleared. Cost and price growth measures remained elevated in the survey. Labour cost growth eased from the spike seen in July but was still elevated at 3.2% in quarterly equivalent terms, while elevated purchase cost growth continued in the month, running at 2.9%. Output price growth also remained high at 1.7% and is well above the recent low of 1% in June. Growth in both retail and services prices moderated more clearly in the month but also remain elevated. With the recent National Accounts release showing GDP growth remained subdued but still positive through Q2, the survey results for August suggest the economy has remained resilient into Q3.
For more information, please see the NAB Monthly Business Survey (August 2023).
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