The National Australia Bank monthly business survey for July shows that business conditions are now indicative of below-trend growth.

Business conditions have dropped for 2 points in June to -1 points for July, recording the weakest outcome since the flood-induced slowdown in January.

“The overall picture remains quite subdued, with trend business conditions deteriorating for a third consecutive month,” NAB said.

According to NAB, the Australian dollar continues to undermine competitiveness forcing business conditions deteriorate across all industries in the month, with the surprising exception of retail, which moved up 18 points to -5 points.

“The exception was retailing where sales strengthened on the back of renewed aggressive discounting, post the very weak sales reported last month,” the bank said.

However, in trend trading terms, retail remained the weakest with -18 points despite rebounding sharply in trading conditions which recorded a 25 points movement up to -7 points, following a very weak June outcome.