"Business conditions have been resilient, slowly edging lower over the past few months but remaining well above their long-run average," said NAB Chief Economist Alan Oster. "Overall, the survey suggests the economy is still holding up and indicates there has been some easing in inflation, although there is still a long way to go to bring inflation back down to the RBA's target band and growth could be more volatile from there," said Oster. The survey followed the decision by the Reserve Bank of Australia last week to pause its rate hikes for the first time since May, leaving rates on hold at 3.6% to assess the tightening impact so far.
Markets suspect rates hikes are essentially over and have priced in a cut of about 15 basis points by the end of this year. Conditions were upbeat with the survey's measure of sales at picking up 1 point to a very high +26 in March, supported by historically low unemployment and rapid population growth. Measures of employment eased 2 points to +10, while profitability eased a touch to +13. Price pressures were easing, adding to evidence that inflation has likely peaked late last year.
The survey's measure of labour costs ticked lower to a
quarterly rate of 1.9% and the growth in purchase costs eased to
1.8%, compared with 3.0% in February.
(Reporting by Stella Qiu; Editing by Sam Holmes)
