June Business Conditions and Sentiments
The June 2026 ABS Business Conditions and Sentiments survey suggests Australia's economy remains in a below-trend growth environment. Business revenues continue to soften, with 31% of firms reporting lower revenue over the past month, reflecting subdued consumer spending and cautious business investment. While forward expectations improved modestly, overall business conditions remain weak, particularly among small businesses.
Inflationary pressures have continued to moderate, with fewer firms expecting operating costs to rise. However, this progress is likely to face renewed headwinds from 1 July, when the 4.75% increase in the national minimum wage takes effect. Labour-intensive sectors and smaller businesses are likely to experience further margin pressure or pass higher costs on to consumers, slowing the pace of services disinflation.
This remains a key consideration for the RBA. Recent RBA minutes maintained a hawkish tone, highlighting the risk that stronger wage growth could delay inflation's return to target. While soft demand continues to support the case for eventual policy easing, emerging labour cost pressures suggest the Bank is likely to remain patient before lowering rates.
Globally, easing geopolitical tensions in the Middle East have helped restore market confidence and reduce oil prices to around pre-conflict levels, providing welcome relief for headline inflation. However, ceasefire negotiations remain fragile, leaving energy prices and inflation vulnerable to any renewed escalation.
Overall, the survey reinforces a familiar theme: domestic demand remains subdued, inflation is gradually moderating, and the path back to the RBA's inflation target is unlikely to be linear. Against this backdrop, Aura Private Credit remains focused on lending secured by real assets and receivables, providing an additional layer of downside protection while seeking to deliver attractive risk-adjusted returns through varying stages of the economic cycle.
Source: Australian Bureau of Statistics, Business Conditions and Sentiment, June 2026.