Business confidence slid one point to minus-six points in July, a National Australia Bank Ltd (NAB) survey showed on Tuesday. Conditions — a measure of profitability, sales and employment — advanced one point to four points, Bloomberg reported.

“Despite improved outcomes relative to those seen at the peak of the impact of the Middle East crisis, the survey shows that the elevated uncertainty has continued to weigh on business confidence,” NAB said.

“Cost pressures amid a softer forward demand outlook suggest continued pressure on margins,” it added.

The result comes as the Reserve Bank is expected to stand pat on Tuesday after raising interest rates at its first three meetings of the year. The RBA is trying to rein in stubbornly strong inflation and began tightening policy even before the US aggression on Iran unleashed a global energy shock.

NAB pointed out that cost pressures “clearly remain an issue for business; labor cost growth, which was not affected by the outbreak of the Middle East conflict, has now risen to its highest level since January 2025, while purchase cost and product prices growth are at or above their pre-conflict levels.”

“Overall, the business survey shows that while most survey indicators have largely normalized since the beginning of the Middle East conflict, there remains a soft underbelly to the survey’s data,” NAB said.