Australia business activity slows slightly in January, costs pressures ease

SYDNEY, Feb 10 (Reuters) - A ⁠measure of ⁠Australian ‍business conditions dipped slightly in January as sales and profits slowed a little, a survey ‍showed on Tuesday, while cost pressures were the lowest ​since 2021 in a hopeful sign for future inflation.

The survey from ​National Australia Bank showed its index of business conditions eased 2 points to +7, reversing a gain made in December. The survey's often ​volatile measure of business confidence edged up 1 point to +3.

A measure of sales dropped 6 points to +10 ​in January, though that is in line with the long-run average, while profits ‌fell 3 points to +8. Employment held steady at +5 for a third straight month, pointing to resilience ​in labour demand.

The survey was ⁠conducted before the Reserve Bank of Australia last week raised interest rates by a quarter ‌point to 3.85%, the first hike in two years, as it tries to control stubborn inflationary pressures.

The survey showed measures ‌of labour and input costs both eased in January, while quarterly growth ‌in retail prices slowed to just 0.3%, from 0.5% in December.

"Measures of cost and price growth in the survey fell to ‍new post-pandemic lows," said Michael Hayes, an economist at NAB.

"Overall, the January survey showed the ⁠economy has retained most of its momentum gained through the past year and the level of activity remains high, notwithstanding some easing in capacity utilisation over recent months."

(Reporting by Wayne ColeEditing by Shri Navaratnam)

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