Australia business confidence and conditions weakened in May amid rising interest rates, survey results from NAB showed on Tuesday.
The business confidence index fell to 6 points from 10 points in April and the business conditions indicator dropped to 16 from 19 in the previous month. The fall in conditions reflects decreases in profitability and trading conditions from very high levels. Nonetheless, the indicator remained well above the average after a strong first few months of the year.
The survey indicates the economy has maintained its momentum into the second quarter and most businesses are in a strong position despite the inflation headwinds, with the lift-off in official interest rates and global growth risks yet to significantly impact Australia's economic trajectory, NAB said.
Lower confidence in May likely reflects a range of risks on the horizon, NAB Group Chief Economist Alan Oster, noted.
"Businesses are facing a new environment of higher inflation, rising interest rates, and risks to global growth. However, confidence is still at a fairly robust level all things considered," Oster added.
