Triple squeeze hits business confidence - NAB Monthly Business Survey September 2026

13 October 2026
Economy & Markets 

• Business confidence fell 4 points to -13 in third consecutive monthly decline

• Business conditions held at -1, as Queensland converges with the rest of the east coast 

• Capacity utilisation remained above average at 82.3%, despite ongoing below average Business conditions

A triple threat of higher interest rates, global uncertainty and elevated fuel and diesel costs is weighing down business confidence, according to the NAB Monthly Business Survey.

The September survey showed confidence fell 4 points to -13 index points, leaving it 18 points below its long-run average and in the bottom 5% of readings in the survey’s history.

NAB Head of Australian Economics Gareth Spence said confidence was weak across the board, with businesses confronting a difficult mix of domestic and global pressures.

“Businesses are being hit from three directions, the interest rate and inflation outlook at home, ongoing global uncertainty and elevated fuel and diesel costs,” Mr Spence said.

“Confidence has now fallen for three consecutive months and is weak across almost every industry. At -13, it is 22 points lower than a year ago and at a level rarely seen in the history of the survey outside of the GFC and the Covid period”.

“That degree of pessimism matters because it can shape hiring, investment and spending decisions, and points to a risk that activity softens further through the final quarter of the year.”

Business conditions were unchanged at -1 index point, with small rebounds in trading conditions and profitability offset by a 3-point fall in employment to its lowest level in five years.

Queensland conditions fell 4 points and are now broadly in line with New South Wales and Victoria. Western Australia remains the clear outlier, with trend conditions at +16 compared with -1 in Queensland, 0 in New South Wales and -3 in Victoria.

“Queensland has now come back into line with the other large eastern states, where conditions are weak,” Mr Spence said.

“Western Australia remains a very different story. Conditions there are a far cry from the rest of the country, even though businesses are facing many of the same pressures from costs, rates and global uncertainty.”

Capacity utilisation eased 0.2 percentage points to 82.3% but remained around 1 percentage point above its long-run average. It increased across five of the eight industries surveyed, with trend utilisation now above average in five industries.

“Capacity utilisation has remained above average for around four years, despite conditions weakening through 2026,” Mr Spence said.

“How that tension resolves will be important for the RBA outlook. Capacity pressures and elevated input costs keep inflation risks in focus, while weak confidence, profitability and employment point to softer activity.”

“The next NAB Spend Trend will also be important in showing how consumers are responding to this mix of higher costs, interest rates and uncertainty.”

NAB Group Executive Business & Private Banking Andrew Auerbach said the results reflected what NAB was hearing from business customers across the country.

“Higher costs, softer demand and ongoing uncertainty are putting some businesses under real pressure,” Mr Auerbach said.

“We’re seeing many business owners take a more cautious approach, keeping a close eye on cashflow and being more deliberate about where they invest.

“At the same time, businesses haven’t stopped looking for opportunities. Many are still investing where they can see clear demand and a clear return, even in a challenging environment.”

Read the full NAB September Monthly Business Survey. (PDF, 768KB)