Australia’s business conditions fell to the lowest in 2.5 years in August after a brief uptick in July as employment confidence sank into negative territory. In terms of price pressures, labor cost growth eased while purchase cost growth ticked higher.
The latest survey from National Australia Bank (NAB) revealed that the business conditions index fell 3 points to +3, the lowest since January 2022 and below its long-run average.
Meanwhile, business confidence fell 5 points to -4 index points, with significant falls in recreation and personal services, transport and utilities, construction, and manufacturing. In trend terms, the level of confidence remains weakest in retail and wholesale.
Retail price growth remained high and continued to outpace broader output price inflation.
“With the recent national accounts showing very soft private sector growth in Q2, the business survey suggests this has carried on into the new financial year and may be beginning to translate into a softer labor market,” stated the survey.
Read: GDP grows by 0.2 percent in Euro area and EU in Q2 2024, reports Eurostat
By industry, business conditions in Australia fell 18 points in wholesale, 9 points in manufacturing, and 6 points in retail. Australia’s transport and utilities sector also witnessed a 5-point decline in business conditions.
Meanwhile, the finance, business and property sector’s business conditions were down 2 points. Australia’s mining sector business conditions rose sharply while construction recreation and personal services were up 1 point each. In trend terms, conditions remain weakest in retail at -6 index points.
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