Australia’s business sentiment improved in June but predates the latest oil price surge and renewed Middle East tensions.
Australia’s business confidence index rose to -5 in June from -14 in May, marking an improvement but still reflecting pessimism. The business conditions index remained steady at +3 for a third consecutive month, according to the latest National Australia Bank survey.
The survey showed retail prices declined for the first time in seven years, a sign of disinflation during a brief period of lower fuel costs. However, this trend reversed as Brent crude prices climbed back near mid-June highs, and geopolitical tensions in the Middle East escalated.
The Reserve Bank of Australia has signaled potential further tightening, and the survey’s softer cost readings are unlikely to sway the next policy decision. Activity growth is expected to slow in the first half of 2026, though the impact of Middle East conflicts has been less severe than feared.