Economy in Brief: July 2025

The National Australia Bank (NAB) survey for June shows a jump in Australia’s business confidence to 5.1 from 2.2 in May and those compared to a reading of -0.7 in April. The sequential averages show a steady improvement from a 12-month average of 0.2 to a six-month average of 1.3 and to a three-month average of 2.2. The monthly May reading is at 2.2. With the June reading moving up to 5.1, it looks like this progression toward improvement remains in train.

Smoothed assessments Smoothing out the monthly data shows that the three-month smoothing operation switches the progression from 12-months to six-months to three-months to reveal improvement that has stalled out. Looking at 12-month averages, there's an improvement over six months compared to 12-months, and then a slight set-back over three months.

Components The components over three months show improvement in train for about half of the categories, compared to 43.8% improving over six months and 25% improving over 12 months. The sense of improvement across categories has been broadening over the more recent periods.

Standings Percentile standings on the data back to 2002 show above-median standings in seven of the thirteen survey categories. Over this period, business confidence itself ranks slightly below its median with a 49.5 percentile standing; the median occurs at a standing of 50-percentile. The index of business confidence is currently close to its median on this, but slightly below it. However, the rankings for the three-month moving average and the 12-month moving average both are considerably lower, indicating that much of the improvement that we see in the Australian index is relatively recent.

Summing up Australia remains caught up in tariff negotiations with the United States along with every other country, a factor that extends uncertainty and could be holding back progress in the economy. However, the current survey suggests that progress is in train, nonetheless.