Cost pressures on businesses continue to rise across the Australian economy, justifying the recent decision by the Bank of Australia to raise interest rates for the first time in more than a decade.
The central bank’s monthly survey showed that cost pressures continued to rise in April after rising in March.
The increase in labor costs amounted to up to 3% and the increase in purchase costs reached 4.6% in quarterly terms in April.
“As expected, the results for inflation in the first quarter showed a sharp rise in inflation and the April data showed a slight decline in the underlying cost pressures, which lead prices higher,” said the chief economist of the central bank.
Despite the increase in costs, the business conditions index increased 5 points to +20, building on the profits recorded in March.
Business confidence fell 6 points to +10 points, and remains higher than the long-term average after months of steady growth.
Source: Capital
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