Business conditions rise to +4 but remain below the long-term average as confidence stays weak amid inflation risks.
Australian business conditions edged higher to +4 in July, according to the latest NAB survey, signaling resilience in the economy despite persistent uncertainty. The reading remains below the long-term average of +7, while business confidence stays fragile, well below pre-conflict levels.
Cost pressures, particularly in transport and utilities due to rising fuel prices linked to Gulf tensions, add to inflation concerns. Capacity utilization and steady sales suggest underlying demand is holding, reducing pressure on the Reserve Bank of Australia to ease its stance on future tightening.
Markets expect the RBA to hold rates at 4.35% today, with attention on the central bank’s communication regarding inflation risks and policy outlook.