Business conditions in Australia remained strong in October despite a slight dip in confidence

　　Despite a slight dip in confidence, business conditions in Australia (RBA) remained firm in October. The National Australia Bank (NAB) survey showed the business conditions index edged up 1 percentage point to +13 in October, while the confidence index slipped 2 percentage points to -2.

　　The report showed that the sales index remained very strong, up 2 percentage points to +20, while the earnings index rose 3 percentage points to +12. Only the employment index fell, down 1 percentage point to +8.

　　NAB chief economist Oster said: "Business conditions remain healthy, having picked up in October and remain well above average. However, a measure of forward orders was much weaker, falling 2 percentage points to 0 in October. While we are seeing an economic recovery, businesses clearly remain cautious about the economic outlook."

　　The Reserve Bank of Australia's (RBA) decision last week to raise interest rates to a 12-year high of 4.35 percent in a bid to tame inflation has added to the caution.

　　The survey also showed that cost pressures eased in October, but at a high level. Quarterly growth in labor costs slowed to 1.8 percent. While overall price growth slowed to its lowest level since mid-2020, 1.0%, quarterly retail price growth remained at 1.9%.

　　Mr Oster said: "Inflation has been persistent through the middle of this year and the survey suggests it remains so going into the fourth quarter. We still expect inflation to slow gradually over time, but this will be a lengthy process, especially given the resilience of inflation."