Australia business activity mostly steady in March before tariff turmoil, survey says

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SYDNEY (Reuters) – A measure of Australian business activity was largely unchanged in March before the turmoil from U.S. President Donald Trump’s tariffs hit, a survey showed on Tuesday, while confidence dipped further into negative territory.

The survey from National Australia Bank (NAB) showed its index of business conditions edged up 1 point to +4 in March, but remained below long-run averages.

The confidence index fell 1 point to -3.

“Businesses remain cautious about the outlook, with confidence and conditions both below average,” said Sally Auld, chief economist at NAB.

“This was before the reciprocal tariff announcements in early April, which may flow through to forward looking measures in the next survey.”

The global business landscape has drastically changed in early April, with Trump imposing a baseline tariff of 10% on all imports and threatening much higher duties on its major trading partners like China.

A measure of consumer sentiment dived from a three-year high in April on worries about the incoming tariffs.

Investors increasingly are convinced the Reserve Bank of Australia will cut rates again in May to offset the potential drag on global economic growth from the tariffs. It held rates steady just last week.

Swaps have fully priced in a quarter-point cut from the RBA in May, with the risk of an outsized 50 basis point reduction. For all of 2025, a total easing of 100 bps has been expected.

In the NAB survey, indices of sales and employment were mostly steady, and price pressures were largely stable last month. Capital utilisation rate, however, rose to 82.9%, from 82%.

(Reporting by Stella Qiu; Editing by Tom Hogue and Sonali Paul)