Australian business conditions remained stable in June, while confidence improved sharply as easing energy and price pressures briefly lifted sentiment across the economy.
National Australia Bank’s latest business survey showed its conditions index holding at positive three points for a third consecutive month. Business confidence rose to minus five, recovering from a deeply pessimistic reading of minus 14 in May.
The improvement followed encouraging developments in the Middle East, where the United States and Iran had reached an agreement intended to end a prolonged conflict that had triggered a global energy shock.
That temporary easing in geopolitical tensions helped reduce some business cost pressures. Product-price growth returned to levels last recorded in February, while retail prices declined for the first time in seven years, according to the survey.
NAB said the results remained consistent with slowing economic activity during the first half of 2026. However, the bank noted that the Middle East conflict had caused less damage to business activity and inflation than initially feared.
The improved sentiment may prove fragile, as tensions in the Gulf have since escalated again. The United States renewed military strikes against Iran and reinstated restrictions on shipping through the Strait of Hormuz, raising fresh concerns about global energy supplies.
Brent crude climbed to around US$85 a barrel, its highest level since mid-June, after surging by almost 10 per cent overnight. The renewed rise in oil prices could increase transport, production and consumer costs for Australian businesses.
The Reserve Bank of Australia has already raised interest rates three times in 2026 in response to inflation linked to the global energy shock, bringing the cash rate to 4.35 per cent.
The central bank left rates unchanged at its June meeting but warned that further increases could still be required if inflationary pressures remained persistent.
While the June survey suggests Australian businesses became less pessimistic, the renewed conflict and higher oil prices could again weigh on confidence, costs and economic growth in the months ahead.
