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SYDNEY, Oct 18 (AFP): The latest survey of Australian business conditions released today showed a jump in inflation during the quarter to September and forecast a slowdown in economic activity in coming months.
The National Australia Bank (NAB) quarterly business survey found that business conditions were slowing and employment weakening in line with even weaker levels of confidence.
NAB chief economist Alan Oster said the survey found further signs of increased retail prices, with "purchase costs currently increasing at the fastest pace since the turn of the century".
A combination of higher oil prices, lower productivity and still tight labour markets will lead to headline inflation rising to 3.25 per cent in the year to September from 2.5 per cent in the June year, he said.
The government's bureau of statistics is due to release its consumer price figures for the September quarter next week.
Oster said he expected headline inflation to remain above three percent until the middle of 2006, not returning to the middle of the 2-3 per cent Reserve Bank target band until later in 2007.
He said confidence levels were even lower than the disappointing levels reported in recent monthly surveys, with the business confidence index falling to one in the September quarter, adjusted, from an index of three in June.
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