Economic News

Australian Business Conditions Surge to 1-Year High, Offset by U.S. Tariff Risks

Australia’s business environment improved sharply in June, with NAB’s Business Conditions Index jumping 9 points to a 13-month peak on July 9, while confidence rose for the third straight month (+3 points). All key metrics strengthened: sales surged 10 points, profitability gained 9 points, and employment edged up 2 points. Capacity utilization hit 83.3%, with future orders climbing 2 points, signaling a shift from early-year weakness and stronger second-half momentum, noted NAB’s Australian Economics Head Gareth Spence.

July 10, 2025, 3:23 pm EDT· 1 minute read

Australian Business Conditions Surge to 1-Year High, Offset by U.S. Tariff Risks

Australia’s business environment improved sharply in June, with NAB’s Business Conditions Index jumping 9 points to a 13-month peak on July 9, while confidence rose for the third straight month (+3 points). All key metrics strengthened: sales surged 10 points, profitability gained 9 points, and employment edged up 2 points. Capacity utilization hit 83.3%, with future orders climbing 2 points, signaling a shift from early-year weakness and stronger second-half momentum, noted NAB’s Australian Economics Head Gareth Spence.

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Price trends diverged: labor cost growth slowed to 1.5% quarter-on-quarter, while purchase costs rose to 1.5%. Final product prices inched up 0.6%, with retail price gains easing from 1% to 0.6%. The upturn aligns with the current rate-cut cycle to boost growth, though external risks loom—Trump’s administration unveiled initial tariff notices the same day, proposing up to 25% duties on goods from Japan, South Korea, and others (effective August 1), threatening global growth and pressuring export-reliant Australian firms.