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Australia NAB business confidence rebounds in June as inflation pressures ease

The NAB survey showed purchase costs cooling to 2.0% quarterly, retail prices falling 0.3%, and labor costs rising after a July 1 minimum wage increase.

Reported · Written up by our desk · Central Banks

Australia’s business confidence improved in June, with the NAB Business Confidence Index rising 9 points to -5, recovering part of the sharp drop seen in March, Action Forex reports. Despite remaining below zero, the survey suggests firms became less worried about the economic fallout from the Middle East conflict, implying the economy is slowing rather than contracting.

The NAB also kept business conditions unchanged at +3, still below the long-run average of +7, indicating activity has stabilized but remains softer than earlier in the year. The improvement was linked by NAB Chief Economist Sally Auld to easing concerns around energy markets and broader geopolitical risks, alongside indicators pointing to moderated growth.

The inflation-related components of the survey moved in a direction that aligns with the confidence rebound. Purchase cost growth slowed further from 2.5% to 2.0% on a quarterly basis, final product price growth eased from 0.9% to 0.6%, and retail prices fell 0.3%, the first decline in seven years.

Labor costs, however, accelerated, rising from 1.5% to 2.0%, which Auld attributed largely to the minimum wage increase that took effect on July 1. Action Forex says these details support an interpretation of growth moderating without falling away.

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