Australia business conditions hold steady in May
The NAB index of business conditions held at +3 in May while confidence improved slightly to -14. Despite the stabilization, profitability remains under pressure from high costs and capacity utilization has fallen below 82% amid soft economic growth.
Australia business conditions stabilized at +3 in May, ending a four-month streak of declines as sales activity strengthened. The reading follows a period of softening domestic demand and persistent global uncertainty. The National Australia Bank survey indicates that while conditions held steady, business confidence remains in negative territory.
### Profit Margins Under Pressure The National Australia Bank survey showed business confidence improved to -14 from -23 in April. Despite this modest recovery, sentiment remains negative across every industry due to elevated cost pressures and a softening domestic backdrop. NAB economist Michael Hayes noted that profitability is the sub-component currently furthest below its long-run average.
