Confidence dropped significantly in the manufacturing and wholesale. The trend level of confidence remained negative in retail and wholesale.

Overall business conditions fell by 1 point to 6 index points, just below the long-run average. Employment improved, rising by 3 points to 5 index points, while trading conditions and profitability both declined by 3 points, as per NAB.

By industry, retail conditions dropped significantly, falling by 7 points. This was partially offset by rises in wholesale (up 9 points) and manufacturing (up 5 points). In trend terms, conditions remained negative in retail, while other industries maintained positive levels.

By state, conditions showed little change in the eastern states but fell sharply in Tasmania, Western Australia, and South Australia. In trend terms, Western Australia and Tasmania remained more elevated, while most states held at reasonable levels. Victoria exhibited the softest trend conditions at +2 index points.

Forward orders saw a slight increase, rising by 1 point to minus 6 index points. Capital expenditure (capex) dropped by 4 points to +4 index points, while capacity utilisation edged up slightly to 83.3 per cent.

Labour cost growth increased to 2.3 per cent in quarterly equivalent terms, up from 1.5 per cent in April. Purchase cost growth also rose to 1.9 per cent, compared to 1.3 per cent in the previous month. Product price growth lifted to 1.1 per cent overall, up from 0.8 per cent. Retail price growth surged to 1.6 per cent from 1 per cent.

Fibre2Fashion News Desk (DP)