SYDNEY, Nov 13 (Reuters) - An index of Australian business conditions declined in October, driven by a slowdown in firms' intention to hire more workers though the labour market remains largely robust even though wages growth is seen growing only at a slightly stronger pace.
The National Australia Bank's NAB.AX index of business conditions, released on Tuesday, slipped 2 points to +12 in October, but remained well above the long-run average of +6.
The survey's volatile measure of business confidence also eased 2 points to +4 in October. Its employment index dropped more sharply to +7 in October from a solid +11 in the previous month.
"At these levels the survey still suggests ongoing employment growth at around 20k per month. At this rate we should see recent labour market gains maintained," said NAB group chief economist Alan Oster.
The official jobless rate has been declining gradually to reach a 6-1/2-year trough of 5 percent in September. Data for October is due on Thursday with a Reuters poll pointing to a small uptick in unemployment to 5.1 percent.
"Labour costs growth edged lower suggesting that despite ongoing employment growth, wages growth remains weak," Oster said.
Sluggish wage growth is one of the main reasons the central bank has kept its cash rate at record low 1.5 percent for over two years.
The survey's main measure of profitability too eased to +12 from +14 in September, while its sales index added a point to a strong +18.
"The survey continues to point to a healthy business sector, with profitability and trading conditions remaining high, and forward looking indicators still favourable," Oster said.
"Employment appears to have dipped this month, but this comes after a run of strong gains in the labour market. We will watch this closely over coming months to see if this is just a temporary pause or a sign of a more durable slowdown in the labour market."
The Reserve Bank of Australia (RBA) has highlighted the resilience of business conditions as it forecast economic growth would top 3 percent this year and next.
Surveyed measures of inflation were subdued in October, with retail prices crawling up at a quarterly rate of 0.2 percent.