The NAB business survey for Australia showed a modest rebound in confidence but weaker conditions in May. The survey's business conditions index fell from plus 2 to zero, with respondents reporting slightly weaker trading conditions, steady weakness in profitability, less pronounced weakness in forward orders and stagnant employment.The survey also showed a bigger increase in labour costs and a steady increase in retail prices.

The survey's business confidence rose from minus 1 in April to plus 2 in May. Sentiment weakened in the manufacturing and mining sector but improved in most parts of the services sector. The survey was conducted in late May, just after the Reserve Bank of Australia cut policy rates by 25 basis points.

The National Australia Bank (NAB) Business Survey is based on a survey of around 500 firms across the non-farm business sector on their assessment of current business conditions and their sentiment about the outlook. The survey's business conditions index covers trading, profitability, employment, forward orders, stocks, and exports, with respondents also providing responses on changes in costs and selling prices. The survey is conducted in the second half of each month.

The survey of business conditions and confidence offers timely updates on how Australian companies are performing and reacting to unfolding events including news about the overall economy and policy developments. as well as moves in the stock market and changes in interest rates. Investors can use the data to help forecast economic activity and better understand how business conditions and expectations affect sales, employment, investment and other economic outcomes.