Australia’s NAB Business Conditions index slipped modestly from 9 to 7 in January, while Business Confidence edged up from 2 to 3. For the RBA, the report showed a clear easing in inflation pressures. Measures of labor and input costs both softened during the month, while quarterly growth in retail prices slowed sharply to 0.3%, down from 0.5% in December.
NAB economist Michael Hayes noted that cost and price indicators have now fallen to “new post-pandemic lows”, reinforcing the view that underlying inflation dynamics are continuing to cool.
At the same time, the survey indicates that the broader economy has not lost much traction. Hayes highlighted that activity has “retained most of its momentum gained through the past year” , even as capacity utilization eased slightly.
