SYDNEY — Australian businesses reported the slowest pace of prices growth in October since July 2020, sending a positive signal that inflation is in retreat.
According to the latest monthly survey of business by the National Australia Bank, overall price growth was just 1.0% in quarterly terms, the slowest pace since the early months of the COVID-19 pandemic.
Labor costs and purchasing costs were also weaker over the three-month period, NAB said.
Despite this, inflation is expected to moderate only gradually over time, with domestic demand levels more resilient than expected, the survey said.
The slowdown in prices growth comes as the Reserve Bank of Australia last week delivered its 13th increase in the official cash rate since May last year, sparking big falls in consumer confidence.
Business conditions rose 1 point to +13 index points in October from September, remaining above the long-run average, the NAB survey showed.
Meanwhile, trading conditions rose 2 points to +20 index points and profitability was up 3 points to +12 index points, while employment eased 1 point to +8 index points.
Business confidence fell 3 points to -2 index points in October from September, with declines in most industries, the survey showed.
Capacity utilization edged lower but remained high at 84%, NAB said.