Australia business conditions steady in May, mood still gloomy

SYDNEY, June 9 (Reuters) - ‌Australian business ​conditions ​steadied in May as sales strengthened a little, a survey showed ‌on Tuesday, while confidence stayed gloomy as ⁠cost pressures squeezed profit margins.

The survey from National ‌Australia Bank showed its ‌index of business conditions held at +3 in May, ending four months of losses. ​Confidence improved modestly to -14, from a deeply pessimistic -23 in April.

"With global uncertainty persisting, ⁠the domestic backdrop softening and cost pressures remaining elevated, confidence ​remains very weak and in negative territory across all industries," said Michael ​Hayes, an economist at ‌NAB.

"Of note, the profitability sub-component is furthest below its long-run average, ⁠suggesting margin pressures persist."

Measure of costs eased somewhat in May but remained high historically. Capacity ⁠utilisation fell below 82% for the first time since ​early 2025, consistent with softer economic growth.

The Reserve Bank of Australia has raised interest rates three ‌times to reach 4.35% as it struggles to control stubborn inflation. ‌Policymakers have been concerned businesses will pass ⁠on rising energy ‌costs to consumers ​and stoke expectations of future inflation.

(Reporting by Wayne Cole; Editing by Jacqueline ‌Wong)

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