NAB Monthly Business Survey: Order books thin as business sentiment slips again

10 November 2026
Economy & Markets

Business confidence and conditions both fell again in October, and a sharp drop in forward orders suggests tougher trading ahead, according to the latest NAB Monthly Business Survey. 

Business confidence edged down 1pt to -15 index points in the month, while business conditions fell 1pt to -2 index points. Forward orders fell 11pts in October to -12 index points, with the decline broad-based but led by construction and manufacturing 

NAB Head of Australian Economics Gareth Spence said the sharp move in forward orders indicated a risk that trading conditions could soften further. 

“Forward orders reflect the pipeline, and a fall of this size points to the risk that trading conditions could soften further over the coming months, particularly given the broad-based declines across industry in the month. Overall business conditions certainly have softened this year, but we could now see some further cooling as we end 2026,” Spence said.  

Spence said the October survey also highlighted retail and construction as industries to watch.

“The softer consumer backdrop remains evident in retail. It reports the weakest confidence, conditions and forward orders of any industry, and its capacity utilisation is the furthest below average. Retail price growth also slowed sharply, down 0.8ppts to 0.2%, reflecting the slowing in goods retailing we have seen in other data,” he said. 

“While capacity utilisation is the highest of any industry in construction, the sharp fall in forward orders in the month and ongoing high input cost growth pose a risk that activity may begin to slow here as well, despite the strong underlying needs for both housing and infrastructure across the country.”

Across the rest of the survey, trading conditions (down 4pts to -1) and profitability (down 2pts to -8) both fell and are now more than 10pts below average, but employment rebounded 5pts to +4 and is back above its long-run average. Capacity utilisation eased 0.1ppts to 82.1%, a third consecutive monthly fall, though it remains well above its long-run average.  

On costs and prices, purchase cost growth edged up 0.1ppts to 2.4% (quarterly rate), labour cost growth eased 0.3ppts, and product price growth edged down to 0.6%, broadly in line with its long-run average.

NAB Group Executive, Business and Private Banking, Andrew Auerbach said the survey reflected the mixed conditions NAB was seeing across its business customer base. 

“There’s no single story for Australian business right now. Some are performing well and looking for their next opportunity, while others are feeling the pressure, particularly those exposed to softer consumer spending. Even in a tougher environment, we’re still seeing businesses willing to invest when the right opportunities emerge,” Mr Auerbach said.

“Our bankers are out there every day talking to customers, and we’ll keep pounding the pavement, listening to businesses and understanding what’s happening on the ground. 

“For customers facing challenges, we’re here to help. We always encourage businesses to talk to us as early as possible so we can work through the options available together.”

Read the full NAB October Monthly Business Survey here (PDF, 892KB).