Confidence continued to rebound from a low in June, rising 10 index points, while business conditions rose to +20 index points with trading conditions lifting.
Employment and profitability are also still strong.
Conditions remain strong across the states and in most industries, although the construction sector saw both conditions and confidence fall.
Low profitability remains a challenge in the construction sector and the brief rally in the July survey now looks like an outlier.
Capacity utilisation remained at a very high level at 86.3 per cent, and the near-term outlook is also positive with forward orders rising.
Measures of cost growth eased slightly in the month after reaching record rates over recent surveys but remain very high by historical standards.
Labour costs grew 3.5 per cent in quarterly terms while purchase costs grew 4.4 per cent. With demand strong, firms continue to pass costs through to consumers with overall product prices growing 2.4 per cent and retail prices growing at an unchanged 3.3 per cent.
Recreation and personal services price growth was also unchanged at 2 per cent.
“The recent strength in business conditions carried into August,” said NAB Group chief economist Alan Oster.
“Official data for retail sales in July confirmed spending remained robust, as suggested by the previous survey. Conditions are strong across most industries other than construction, where profitability remains a challenge.
“Confidence took a hit around June as interest rates first began to rise but it seems that firms’ initial concerns about the impact have eased and a more positive outlook is prevailing, at least for the time being.”
