Business confidence in Australia rose 5 points to negative 24 in April, driven by partial recoveries in retail, construction, and recreation and personal services, although trend confidence remained strongly negative across all industries and regions, National Australia Bank (ASX:NAB) said in a Tuesday report.

Business conditions fell by 3 points to 3 index points, marking a fourth straight monthly decline and remaining well below the long-run average, while employment declined, profitability remained flat, and trading conditions weakened.

The April survey shows that the energy price shock is creating challenges for businesses, with rising cost pressures and a weakening outlook for future demand, said Gareth Spence, NAB head of Australian economics.

Conditions declined across most industries, with slight improvements in manufacturing and retail, while by state, they rose by 12 points in Victoria but fell in all other regions.

Capacity utilization fell to around 83%, its lowest level since July 2025, but still above its long-run average, while forward orders dropped by 4 points in April and capital expenditures fell by 8 points.

Purchase costs rose to 4.5% on a quarterly equivalent basis, while labor costs edged up to 1.7%, product prices increased to 1.8%, and retail prices increased 3.2% to reach a multi-year high.