In March, Australian business conditions remained relatively stable despite high interest rates. Sales and employment levels held steady, while price pressures slightly eased from elevated levels. The National Australia Bank (NAB) survey showed that business conditions saw a slight dip of 1 point to +9, which reflects consistently above-average activity over the past year. Business confidence increased by 1 point to +1.
The survey revealed that business sales remained steady at +14 and employment levels stayed unchanged at +6. However, profitability decreased by 4 points to +6. Capacity utilization also decreased slightly from 83.4% to 83.2%, indicating a gradual improvement in supply and demand balance.
According to NAB’s chief economist, Alan Oster, firms remain cautious about the economic outlook despite the resilience of the economy. Positive news was noted in the retail and construction sectors for the month. Quarterly growth in retail prices decreased to 1.3%, down from 1.4% in February, suggesting potential relief from inflation pressures. Purchase costs growth also fell from 1.8% to 1.4%. Oster anticipates that progress in bringing inflation back to target will be gradual.
The Reserve Bank of Australia (RBA) maintained interest rates at 4
