Prices pressure ease
The business surveys are the closest we have to real-time indicators of what's going on in the Aussie economy.
And this was a killer slide from NAB's September Business Survey, showing cost and price pressures easing across the board, and not insignificantly so:
Source: NAB Business Survey
Business conditions eased from +14 to +11, as the previously overheated economy continues to normalise.
Source: NAB Survey
CommSec kindly went to the trouble of providing a neat graphical summary, which shows from purchase costs, labour costs, and final prices have all eased significantly since peaking at record highs last year.
Markets liked this very much, and the ASX has shot up +1.21 per cent today, largely due to this news.
Economists are also calling the peak of the interest rate cycle, with the focus likely to shift towards interest rate cuts later in 2024.
Forward orders picked up a bit, and capacity utilisation is also holding up.
Couldn't have hoped for a much better update than that.
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Builders are finding that although materials price pressures have eased, there are still ongoing skills and labour shortages across the construction sector, with a third of large builders now stuck with negative cashflows.
As such, developers cannot afford to deliver the required housing today, with the government's stated target of a record 1.2 million homes over 5 years a distant pipedream.
