By SYDNEY (Reuters) – Australian business confidence rebounded to its highest in almost two years in October as sales proved resilient and pressure on input costs eased, a survey showed on Tuesday.
The survey from National Australia Bank (OTC:NABZY) (NAB) showed its index of business conditions held at +7 in October. The more volatile confidence index climbed 7 points to +5, the highest reading since early 2023.
Sales showed a 1 point rise to a strong +13 in the month, while profitability was steady at +5 and employment intentions dipped 2 points to +3.
“Confidence spiked in the month after an extended period of below average reads,” said Gareth Spence, NAB’s head of Australian economics. “While it’s just one month this is an encouraging sign alongside a tentative improvement in forward orders.”
The improvement came as a separate survey of consumer confidence from Westpac showed a second month of strong gains in November, partly on hopes for lower borrowing costs.
The Reserve Bank of Australia has held interest rates steady at 4.35% for a full year and financial markets are confident the next move will be down, albeit not for a few months yet.
Measures of cost pressures in the NAB survey suggested inflation was slowly easing with growth in input costs slowing to a quarterly pace of 0.9%, from 1.3% in September. Growth in labour costs eased to 1.4%, from 1.9%, and product prices to 0.5%, from 0.6%.
“The survey, like other price indicators, continues to suggest an ongoing gradual easing in inflation pressure, but also that there is still some way to go in the moderation,” Spence said.
The official measure of consumer price inflation slowed sharply to 2.8% in the September quarter, though much of that was due to temporary government rebates on electricity bills.