Australia's Business Conditions Inch Up, Confidence Remains Frail

Australia's business conditions saw a marginal improvement in July, according to a recent survey. The National Australia Bank's index of business conditions rose by 1 point to +4, but still remains below its long-run trend of +7.

However, the survey also showed that confidence levels remain fragile, stuck at -6, which is well below the level seen in February before the US-Israeli war on Iran began. The uncertainty surrounding global events has continued to weigh on business confidence, with cost pressures and a softer forward demand outlook contributing to the pressure on margins.

The transport and utilities industry was a key driver of the rise in both final prices and purchase costs, reflecting swings in fuel prices. Meanwhile, the Reserve Bank of Australia meets on Tuesday and is widely expected to hold interest rates steady at 4.35% following three hikes this year.