NAB Business Confidence Rebounds to -5; Inflation Cools

Australia's business confidence climbed 9 points in June to -5, recovering much of the deterioration from March, the NAB monthly business survey showed. The index remained negative but posted its largest gain since the survey began tracking the current cycle.

Business conditions held at +3, below the long-run average of +7. NAB Chief Economist Sally Auld said the improvement reflected easing concerns over energy markets and geopolitical risks, with the economy slowing without contracting.

Inflation indicators in the survey softened. Purchase cost growth slowed to 2.0% on a quarterly basis from 2.5%. Final product price growth eased to 0.6% from 0.9%. Retail prices fell 0.3%, the first decline in seven years.

Labor cost growth accelerated to 2.0% from 1.5%, reflecting the minimum wage increase that took effect July 1, Auld said.

The survey covers business conditions through June.