SYDNEY, March 14 (Reuters) - Australian business
conditions remained resilient in February with sales and
employment strong, even as confidence took a turn for the worse
amid high inflation and rising interest rates.
The survey from National Australia Bank Ltd (NAB) released on Tuesday showed its index of business conditions
dipped one point to +17 in January, still well above its
long-run average.
The volatile measure of confidence fell back to -4, erasing
January's bounce to +6.
"Overall, the survey confirms the ongoing resilience of the
economy through the first months of 2023, though we continue to
expect a more material slowdown in demand later in the year when
the full effect of rate rises has passed through," said Alan
Oster, NAB's chief economist.
The survey paints a mixed picture for the Reserve Bank of
Australia (RBA) which cited the strength of business activity as
one reason it hiked interest rates to a decade-high of 3.6% this
month.
Markets had thought another two hikes were likely, until
turmoil in the U.S. banking sector radically altered thinking on
policy tightening worldwide.
Now, swaps and futures imply only a minor chance
the RBA will lift rates at its April meeting, and suggest it
could be done tightening altogether. The survey was conducted from Feb. 20 to 28, so it missed
the recent chaos in financial markets after Silicon Valley
Bank's collapse.
Conditions were generally upbeat with the survey's measure
of sales at a very high +27 in February, supported by
historically low unemployment and rapid population growth.
Measures of employment edged up 1 point to +11, while
profitability eased a touch to +14.
The survey's measure of labour costs ticked up to a
quarterly rate of 2.8%, but retail price growth eased to 1.9%.
(Reporting by Wayne Cole; Editing by Jamie Freed)
Messaging: wayne.cole.thomsonreuters.com@reuters.net))
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