SYDNEY: A measure of Australian business confidence has swung into the red as a surge in coronavirus cases hit consumer spending and played havoc with staffing, though sales overall were proving resilient so far.
Tuesday’s survey from National Australia Bank (NAB) showed its index of business confidence slid 24 points to -12 in December, below the trough during the Delta wave last year, report agencies.
“It fell despite strong jobs growth reported in official data, reflecting the complexity of the labour market situation as businesses faced growing worker shortages and the prospect of a ‘shadow lockdown’ through the summer,” said NAB chief economist Alan Oster.
There were more signs of inflation in the survey as purchase costs jumped to 2.8 per cent in quarterly terms, the highest since 2008, while growth in final product prices firmed to 1.5 per cent and retail prices advanced 2 per cent in quarterly terms.
Official data out on Tuesday is expected to show core inflation rose at its fastest annual pace since 2014 in the December quarter, adding to speculation the Reserve Bank of Australia (RBA) might hike interest rates as early as May.
“With significant disruption to supply chains and labour markets, price pressures are to be expected and the key question will be how quickly, if at all, these pressures abate over coming months,” said Oster.
Australian core inflation accelerated to its fastest annual pace since 2014 in the December quarter as fuel and housing costs led broad-based price pressures, a shock that will stoke market speculation of an early hike in interest rates.