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Along with the ANZ’s consumer sentiment survey, NAB has chimed in with the release of their monthly business survey.
Generally the mood is buoyant, with Omicron disruptions apparently a fast fading memory (even if Covid deaths this year are already more than in 2020 and 2021, and still rising).
Business conditions, for instance, rose 9 points last month to be +18, the largest one-month jump since June 2020.
Peter Hannam
(@p_hannam)@NAB‘s latest survey of business confidence and conditions both showed rises, with conditions in March posting the biggest monthly jump since June 2020. #auspol #AusVotes2022 pic.twitter.com/qVd0cml1UP
In trend terms, confidence remained strong “across all industries”, NAB said. By sector, confidence rose sharply (or is that, “accelerated”) in transport (up 16pts), construction (15pts), and for recreation & personal services (up 11pts).
Among the states, confidence was “strong across the board” and rose the most in Tasmania (up 21pts), SA (up 14pts) and WA (up 13pts), “while the other states were largely steady”.
“The retail sector drove much of the improvement in conditions,” says NAB’s chief economist Alan Oster. “That indicates household consumption continues to grow strongly with consumers undeterred by rising inflation, at least so far.
But there is a cloud gathering – the pressure on costs and prices. Purchase costs, for instance, rose a record 4.2% in March, eclipsing the 3.2% rise seen in January. The three-month average of 3.4% was also the highest on record.
Notably, labour costs are rising but not at the gradient of purchase costs.
Peter Hannam
(@p_hannam)But NAB’s survey also showed cost and price growth measures rising to record levels last month. Purchase cost growth, for instance, reached 4.2% in quarterly terms, while labour cost growth – presumably a proxy for wages – rose 2.7%. #AusVotes2022 #auspol pic.twitter.com/PtyrzNbNgr
Since profitability seems to be holding up, that points to companies merrily being able to lift their prices accordingly.
“Importantly, it appears businesses have had little trouble passing on higher costs to consumers with prices – including retail prices – also rising at record rates,” Oster said, adding that the bank expects “very strong inflation in Q1 and likely Q2” when official numbers are released.
For the March quarter, the official CPI figures will drop on April 27, potentially an awkward number for the government. The June quarter data, though, won’t land until three months later, or well into the new term of the government.
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