The National Australia Bank Ltd. $(NAB.AU)$ has released its May Monthly Business Survey, indicating a continued decline in business conditions. The survey revealed that business conditions weakened further, with employment conditions deteriorating and both trading and profitability remaining below long-term average levels. Chief Economist Sally Auld noted that despite recent activity increases, the trend in business conditions has steadily declined since late 2024, largely due to weak profitability, which continues to be in negative territory. In contrast, business confidence saw some improvement, narrowing the gap with business conditions. However, confidence is still weakest in the retail and wholesale sectors. All other industries, except for finance, business, and property services, reported positive business confidence in May. The persistent challenges in retail align with a softer than expected consumption recovery in Q1. Capacity utilisation showed a positive uptick, reaching 82.3%, and capital expenditure increased to +6 index points. Nevertheless, forward orders remained subdued at -2 index points, below the long-term average of +1 index point. Price indicators presented a mixed picture; labour costs experienced robust growth at 1.7% in quarterly equivalent terms, while purchase costs growth eased to 1.1%, along with a decrease in final product price growth to 0.5%. Retail price growth held steady at 1.2%, reflecting ongoing pressures on profitability. Dr. Auld emphasized the need to monitor potential continued softening in labour demand, as the employment index has dropped below average levels.