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Australia Business Sentiment Stays Weak

Australia’s NAB Business Confidence Index held at -6 in July 2026, unchanged from a revised reading in the previous month and remaining well below the level recorded in February before the U.S.-Israeli war on Iran began. Meanwhile, business conditions edged up (4 vs 3 in June), but stayed below the long-run average of 7. Employment and profitability improved, while sales were unchanged. Capacity utilisation rose sharply to 83.0%, led by the finance, business and property, and wholesale industries. NAB said that despite improved outcomes from the peak impact of the Middle East crisis, “elevated uncertainty has continued to weigh on business confidence.” It also noted that cost pressures alongside a softer outlook for forward demand were likely to keep margins under pressure. Final prices and purchase costs increased, driven largely by swings in fuel prices, with transport and utilities among the key contributors.

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