Australia Business Confidence Rebounds From Lows as Cost Pressures Ease Sharply

Australia's NAB Business Confidence index climbed to -14 in May from a deeply depressed -23 in April, driven partly by easing fears of a Middle East energy shock. Business Conditions held steady at +3, with trading and employment edging higher while profitability remained under pressure. Critically, inflation indicators moderated sharply — purchase cost growth fell from 4.5% to 2.6% and retail price growth halved to 1.5% — suggesting prior RBA tightening is cooling demand. Despite the improvement, confidence remains negative across all industries, capacity utilisation has slipped below 82%, and markets interpret the data as reinforcing an RBA easing bias without triggering immediate rate cuts.