Australia's Business Mood Lifted in June, But the Data Aged Fast
NAB's June survey showed improving confidence and falling retail prices — but a fresh Middle East flare-up may have already erased those gains.
Australia's businesses were feeling a little better in June, according to a fresh survey from National Australia Bank — but here's the catch: the conditions that sparked that optimism have already unraveled. NAB's business confidence index climbed to -5 from a deeply gloomy -14 in May, while the business conditions index held flat at +3 for a third month running. The rebound was largely credited to a brief U.S.-Iran agreement that seemed to put a lid on the Middle East conflict rattling global energy markets.
The survey also delivered a genuinely eyebrow-raising inflation signal: retail prices fell for the first time in seven years, and broader product price growth cooled back to February levels. That sounds like great news for Australians getting squeezed by high borrowing costs — except the window when those prices dipped was incredibly short. The calm existed while a ceasefire held and fuel costs eased, a moment that lasted only days before reversing.
Read more Australia's Business Mood Lifted in June, but the Rally Won't Last →
Since the survey closed, the Gulf has flared back up. The U.S. renewed strikes on Iran and reinstated a shipping blockade through the Strait of Hormuz, sending Brent crude jumping roughly 2% to around $85 a barrel — near its highest point since mid-June. That kind of energy shock is exactly what central bankers lose sleep over, because it can reignite the inflation trends the data seemed to be calming down.
For the Reserve Bank of Australia, this complicates the picture significantly. The RBA has already hiked rates three times this year, bringing its benchmark to 4.35%, and chose to hold steady in June. But officials were careful to say further tightening can't be ruled out. With oil prices climbing again and the softer price readings in NAB's survey now looking like a brief blip rather than a lasting trend, the RBA has little reason to start patting itself on the back just yet. NAB's own read is that activity growth will continue slowing through the first half of 2026.
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