FX.co ★ Australia Business Mood Improves for 3rd Month

Australia's NAB Business Confidence Index increased notably to 5 in June 2025 from 2 in May, reaching its highest level since January and showing an upward trend for the third consecutive month, aligning with the long-term average. Business conditions showed a substantial recovery (9 compared to 0 in May), with significant improvements in sales (15 compared to 5), profitability (4 compared to -5), and employment (3 compared to 1). Most sectors saw better conditions, especially manufacturing and retail, which saw the most significant turnarounds following significant declines in May. Forward orders improved (0 compared to -2), capital spending surged (10 compared to 6), and capacity utilization increased (83.3% compared to 82.3%). Although input cost pressures remained, with purchase costs rising slightly (1.5% compared to 1.2%), they stayed within the range seen in mid-2024, while labor cost growth experienced a mild decrease (1.5% from 1.7%). Product price growth slightly increased to 0.6%, whereas retail price growth declined to a two-year low of 0.6%. "The survey indicates that the sluggish momentum seen in early 2025 is likely to pick up in the second half," commented Gareth Spence of NAB.