Australian businesses resilient despite challenges: Survey

Despite some stabilisation, business confidence remains below its long-run averages at -1 index points, particularly in the retail and wholesale sectors where the negatives are more pronounced. However, there has been a broad-based lift in confidence, led by manufacturing, according to the Quarterly NAB Business Survey March 2023.

Importantly, price and cost growth measures showed some easing in March, with both labour cost growth and purchase cost growth easing after holding up at very high levels in January and February. Output price growth measures also ticked lower, although they remain well above ‘normal’ rates of growth.

These results support expectations that inflation likely peaked in the fourth quarter (Q4) of 2022, with the full Q1 consumer price index (CPI) set to show some improvement when the data is released later in April. However, the rate of price growth and underlying pressures remains well above ‘normal’ levels, and any moderation in inflation is likely to be gradual.

Across the states, conditions were significantly lower in Tasmania, Queensland, and South Australia, but all had been at very high levels in February. Conditions in New South Wales also eased slightly while Victoria saw a rise. Conditions continued to be robust across all states in terms of trends.

Despite these positive signs, the survey's leading indicators were little changed. Forward orders inched higher, up 1 point to 4 index points as much of the February fall in wholesale was reversed. Capacity utilisation was at 85.1 per cent.

ALCHEMPro News Desk (NB)