Conditions Negative, Confidence Partially Improves - NAB Quarterly Business Survey Q3 2026

24th September
Economy & Markets 

• Business confidence rises 8 points to -11, remains well below long-run average.

• Business conditions fall to -2 index points, first negative reading since September 2020. 

• Profitability and trading conditions weaken as sales margins fall to lowest level since June 2020.

Business confidence partially recovered in the September quarter, but conditions fell into negative territory for the first time since September 2020, according to NAB’s Q3 Quarterly Business Survey. 

Confidence rose 8 points to -11, partially reversing the previous quarter’s sharp decline, while business conditions fell 3 points to -2 as profitability and trading conditions weakened.

NAB Chief Economist, Sally Auld, said Australian businesses were working in a challenging cost environment.  

“Renewed margin pressure was a key development in the quarter, with sales margins falling a further 4 points to -20 index points – their lowest level since June 2020 – and margin pressure becoming the second most significant issue affecting confidence,” Ms Auld said.

“Purchase costs rose 1.2% in the quarter, more than double the 0.5% increase in final product prices. That gap is squeezing margins and leaving firms with less scope to absorb higher costs or pass them on to customers.  

“Beyond purchase cost pressures, labour costs and availability remain a significant challenge for firms. Labour cost growth rose to 1.2% quarter-on-quarter, wage costs remained the biggest issue affecting confidence, and the share of firms reporting labour as a significant constraint on output increased by 2 points to 29%. Together, these pressures are weighing on profitability.” 

Read the full report here (PDF, 402KB).