SYDNEY, Feb 13 Reuters Australian business conditions softened further in January led by a slowdown in the service sector, a survey showed on Tuesday, while price pressures ticked up again after cooling the month before.

The survey from National Australia Bank NAB showed its index of business conditions slipped 2 points to 6 in January, just below its longrun average of 7.

Its measure of business confidence added 1 point to 1, following a 7point rebound in December.

Confidence remains weak as it has for some time, consistent with ongoing pressures across the economy with growth clearly slowing in the back half of 2023, and cost growth still high, said NAB39;s chief economist Alan Oster.

The survey39;s measure of business sales eased 3 points to 11, while both profitability and employment dipped 2 points to 5. Capacity utilisation picked up to 83.6, from 82.8.

Quarterly growth in purchase costs edged up to 1.8 in January, while growth in retail prices rebounded to 0.9 from 0.5 in December.

Price pressures remain solid despite the ongoing easing in activity measures, Oster said. However, they typically lag activity in the economy and we expect an ongoing easing in price pressures across the economy in early 2024.

The Reserve Bank of Australia RBA has lifted interest rates to a 12year peak of 4.35 in an effort to restrain inflation and continues to warn that another hike might be needed even as the economy slows.

Reporting by Wayne Cole; Editing by Stephen Coates…