Australia Business Sentiment Inches Lower

Australia’s NAB Business Confidence Index edged up to 3 in December 2025 from an upwardly revised 2 in the previous month. Meanwhile, business conditions strengthened (9 vs 7 November), driven by gains in both sales (16 vs 13) and profits ( vs 4) while employment held steady (at 4). Price measures ticked higher in the three months to December, though capacity utilisation eased only slightly to a still elevated 83.2%. “The survey is consistent with the view that momentum improved in the Australian economy in the fourth quarter,” said NAB Chief Economist Sally Auld, noting that elevated utilisation was broad-based. Tuesday’s figure preceded December inflation data, after November eased to 3.4%, a three-month low but still above the central bank's 2–3% target. Meantime, the Reserve Bank is set to begin its first policy meeting of the year next week, having maintained the cash rate at 3.6% for the third month in a row in December.

Australia’s NAB Business Confidence Index slipped to 1 in November 2025 from 6 in the previous month, marking the weakest reading since April. At the same time, business conditions softened (7 vs 10 in October), retreating from their highest level since March 2024, as declines in sales (12 vs 18) and profitability (4 vs 9) offset relatively stable employment (4 vs 3). Despite softer sentiment, capacity utilisation edged higher to 83.6%, the strongest in 18 months, suggesting firms continue operating near full capacity. Price indicators also firmed, with growth in purchase costs rising at a quarterly pace of 1.3% and retail prices climbing 0.8%. “Overall, the survey continues to tell us that businesses are capacity constrained, and if economic growth accelerates further from the current starting point, we may quickly see additional pressure on prices,” said NAB Chief Economist Sally Auld.

Australia’s NAB Business Confidence Index edged down to 6 in October 2025 from 7 in the previous month, though it remained above the long-run average. Meantime, business conditions improved slightly (9 vs 8 in September), supported by stronger sales (19 vs 14) and profitability (9 vs 6), while employment remained unchanged (at 3). Simultaneously, price pressures eased, with purchase costs rising at a quarterly rate of 1% and labour costs at 1.5%. The capacity utilisation rate also inched up to 83.4% from 83.3%, indicating activity levels remain high. NAB Chief Economist Sally Auld said the continued strength in business conditions shows the economy has maintained the momentum built since late 2024. However, she noted that growth is occurring amid limited spare capacity, with high utilisation and persistent wage and margin pressures still weighing on confidence.