Australia Business Confidence Hits 4-Month High

Australia’s NAB Business Confidence Index jumped to -5 in June 2026 from -14 in May, marking its strongest reading since February as sentiment improved following the easing of geopolitical tensions. Meanwhile, business conditions held steady at 3 for a third consecutive month after the U.S. and Iran reached an agreement to end their multi-month conflict in the Middle East. Price pressures also moderated, with product price growth slowing to its weakest pace since February and retail prices falling for the first time in seven years, according to the survey. Despite the improvement in confidence, the results continued to point to subdued business activity through the first half of 2026. NAB noted that while the Middle East conflict had raised concerns over growth and inflation, its impact on business activity and pricing proved less severe than initially feared, helping support a more resilient business environment.

Australia’s NAB Business Confidence Index rose to -14 in May 2026 from -24 in April, marking its highest print since February and signaling modest improvement from very weak levels. Confidence, however, remained firmly negative, underscoring concerns over the economic outlook. Business conditions held at 3, halting a four-month slide as activity stabilized despite softer demand. Profitability stayed the weakest component relative to long-run norms, reflecting margin strain from elevated costs. Cost growth eased but remained historically high, while capacity utilisation slipped below 82% for the first time since early 2025, pointing to softer momentum. NAB economist Michael Hayes noted sentiment was negative across industries amid global uncertainty, a weakening domestic backdrop, and persistent cost pressures. Firms also face high borrowing costs after the central bank lifted rates to 4.35% to curb sticky inflation and prevent rising energy costs from feeding into consumer prices.

Australia’s NAB Business Confidence Index rose to -24 in April 2026 from -29 in the previous month, which had marked the second-largest monthly drop on record. The survey flagged mounting strain from surging energy costs tied to the Middle East conflict, squeezing margins and curbing investment. Meanwhile, business conditions slid to 3 from 6, the second-lowest since 2020 and the fourth straight decline. NAB economist Michael Hayes warned rising costs were eroding activity, with forward orders, capex, cash flow, and employment all well below norms. Capital expenditure plunged 8 points, its sharpest drop since the post-pandemic rebound. Cost pressures intensified: purchase costs rose 4.5% qoq, far outpacing selling price growth of 1.8%, while retail prices jumped to 3.2% from 0.6%. The weak survey comes as the central bank lifted rates for a third consecutive meeting to 4.35%, amid concern firms may pass higher energy costs to consumers, stoking inflation expectations.