Australian business activity rebounds in February – survey

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SYDNEY, March 8 (Reuters) – A measure of Australian business conditions rebounded in February as dwindling Omicron business led customers to return to stores and supply bottlenecks eased across all sectors.

Tuesday’s survey from the National Australia Bank (NAB) (NAB.AX) showed its trading conditions index rose 7 points to +9 in February, reversing all of January’s decline. The confidence index climbed 9 points to +13, well above the December low of -12.

The survey’s sales metric took two points to +10, while profitability rose to +5. There was also a welcome jump of 9 points from employment to +8.

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“The employment index has improved significantly as the labor market strengthens, after the virus kept many people out of work due to illness or isolation requirements at the height of the pandemic. recent wave,” said NAB chief economist Alan Oster.

“That said, the month’s survey was largely completed before the invasion of Ukraine, so we’ll have to wait to see the extent of the conflict’s impact on confidence.”

Measures of futures orders and business investment also picked up, suggesting that the recovery would continue.

Inflation remained an issue as purchasing costs rose at a quarterly rate of 2.7% amid high commodity prices. Labor costs held steady at a 1.7% pace, while retail price growth jumped 2.1% to match highs seen at the end of 2021.

“The results suggest that another quarter of strong inflation is likely when the March quarter CPI is released next month,” Oster said.

Analysts have warned that the March quarter consumer price index could again surprise on the upside and put pressure on the Reserve Bank of Australia (RBA) to start raising interest rates during of the next few months.

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Reporting by Wayne Cole; Editing by Sam Holmes

Our standards: The Thomson Reuters Trust Principles.

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