Australia's NAB business conditions index rose to +4 in July from +3 in June, showing modest resilience in business activity, but the result remained below the long-run average of +7 and business confidence was unchanged at -6. The survey pointed to a widening gap between steady current conditions and a cautious outlook as firms faced renewed cost pressure tied to higher oil prices and Middle East tensions. Transport and utilities, the sector most exposed to fuel costs, was the main driver of increases in input costs and final prices. Profitability and employment improved, the trading index held at 8, and capacity utilization climbed to 83.0% from 82.1%, led by finance, business and real estate, and wholesale trade. NAB Chief Economist Alan Oster said conditions had improved from the peak impact of the Middle East crisis, but uncertainty was still weighing on confidence, while softer demand and persistent cost pressure were likely to keep margins under strain. The results leave the Reserve Bank of Australia facing mixed signals, with resilient activity and firmer pricing pressure on one side and weak confidence and a subdued demand outlook on the other.