Australian business conditions held steady in September while confidence improved, pointing to resilient activity but soft hiring, according to NATIONAL AUSTRALIA BANK LIMITED (ASX:NAB) latest monthly survey. NAB’s business conditions index was unchanged at +8 and confidence rose three points to +7, a touch above long-run averages. “Both business confidence and conditions appear to be consolidating slightly above trend after improving through mid-2025,” said NAB Chief Economist Sally Auld.
Trading conditions strengthened, with sales up three points to +16 and profitability lifting to +6, extending gains since May. Forward orders fell three points into negative territory, signalling caution ahead. Price indicators were mixed: input costs ticked higher; retail price growth accelerated to 0.7% from 0.5%; and labour cost growth eased to 1.5%.
CreditorWatch Chief Economist Ivan Colhoun said: “Bottom line: A very interesting survey, with the renewed rising trend for capacity utilisation not supporting the prospect of further near-term interest rate cuts by the RBA.” He added: “Input cost pressures have stabilised at rates typically in excess of what would be consistent with the RBA’s inflation target, though firms at this stage are not increasing retail prices at a commensurate rate.”
By state, Queensland continues to report the strongest conditions, New South Wales is broadly in line with the national average, and Victoria improved to +5 after a softer run. By industry, Mining and Transport & Utilities posted sharp monthly gains after earlier tariff-related weakness, while Retail, Manufacturing, Construction and Finance, Property and Business Services improved.
Colhoun noted: “Cap use rose a little further in September, to the equal highest level since May last year,” adding that “The reported improvement in conditions is good news for businesses and consumers as it suggests the unemployment rate will continue to remain low in the near future.”