SYDNEY, April 14 (Reuters) – Australian business confidence plunged last month by a magnitude only seen during financial crises as the Iran war gave rise to a global oil shock, a survey showed on Tuesday.
The survey from National Australia Bank showed its index of business confidence tumbled 29 points to -29 in March, the second largest monthly fall in history, though business conditions held steady at +6.
A measure of sales edged lower 1 point to a relatively firm +11, but profits fell to +1 from +4, suggesting firms are grappling with squeezed margins as purchase costs jumped by a quarterly rate of 3% in March.
There are signs that businesses are struggling to pass through higher costs to consumers, with the growth in retail prices easing to a quarterly rate of 0.5% from 0.9%.
The Reserve Bank of Australia also raised interest rates by a second time in March to 4.1%, undoing two of three rate cuts from last year. Sharply higher fuel costs from the conflict in the Middle East are likely to lift headline inflation to around 5% in the second quarter, the RBA has estimated.
A separate survey nP8N3ZD0CA out on Tuesday showed consumer sentiment slumped in April to its lowest in more than two years. An index measuring appetite for large purchases plunged 15% as consumers tightened their wallets.
(Reporting by Stella Qiu; Editing by Edwina Gibbs)
