Free Trial

NAB Indicators Signal Easing Price Pressures

AUSTRALIA DATA

The September NAB business survey showed that while the economy has slowed it is looking resilient (see MNI NAB Survey Shows Slowing But Resilient Economy). It also pointed to a significant easing in cost and price pressures, which should be good news for the RBA. Fuel prices were noted to have “risen noticeably” in this month’s RBA statement but it seems in wait-and-see mode as it is unclear if demand is strong enough to pass on higher costs to customers. With NAB purchase cost inflation down to its lowest since mid-2021, final product inflation has eased too.

  • Costs and prices rose in Q3 with higher wages and petrol prices impacting the quarter but by September pressures had returned to their pre-July trend. This is consistent with the uptick in August headline inflation and there could also be a pick-up in Q3 CPI, but the survey is suggesting that it may be temporary. A large uncertainty though is global oil prices given current geopolitical tensions.
Australia CPI y/y% vs NAB price final products

Source: MNI - Market News/Refinitiv

  • NAB labour costs rose to 4% in July but have moderated to 2% in September, the lowest since November 2021. Purchase costs eased to 1.8% from 2.9% in August.
  • As a result, final product price inflation is down to only 1% from 1.7%, the lowest since mid-2021. But retail prices held steady at 1.8%, which is still low compared to 2022 readings.
Australia NAB business survey price/cost components

Source: MNI - Market News/Refinitiv

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.