Australia business conditions weakened to the lowest since late 2023, while confidence showed an upward trend in the second quarter, survey data from NAB showed on Thursday.
The business conditions index declined to 0 index points from 2 in the first quarter. This was the lowest level since the third quarter 2020.
Profitability remained negative at -4 index points, while trading conditions and employment both eased by 2 and 1 point, respectively.
Data showed that the business confidence index rose to -1 in the second quarter from -3 a quarter ago. This was the best reading since late 2022, NAB said.
Leading indicators showed moderate gains in the second quarter. Expected business conditions rose one point, and forward orders climbed two points. Capex plans over the next twelve months moved up four points but capacity utilization declined to 82.3 percent, the survey showed.
Constraints on output eased in the second quarter. The share of businesses reporting significant constraints from labor, sales, premises and material was either unchanged or declined.
Reported costs growth was little changed as labor cost edged up 0.1 point, while purchases costs edged down by the same amount.
At 0.6 percent, retail price growth eased to the lowest level since early 2021. Final product price growth remained more muted, at 0.4 percent.
The NAB observed that wage costs were again the top issue affecting business confidence, followed by pressure on margins.