Business confidence dipped slightly in October, but NAB’s latest Monthly Business Survey shows conditions continuing to improve, rising 2pts to +9 — their highest level since March 2024.
Trading conditions jumped 5pts and profitability rose 3pts, signalling firmer underlying momentum.
Sally Auld (pictured), NAB chief economist, said the upswing is becoming more widespread.
“Business conditions improved further after consolidating near average over recent months… private sector activity has strengthened a little further,” Auld said in a NAB report.
Confidence remains above its long-run average, supported by easing cost pressures and sustained improvements across multiple industries.
Retail and wholesale recorded some of the month’s strongest gains after an extended period of weakness, reflecting improved consumer spending over the past year.
Mining and services remain the best-performing sectors in trend terms, while capacity utilisation continues to sit above average in most industries — a sign activity levels remain high.
Price and cost growth remain relatively benign, with purchase costs rising just 1% on a quarterly equivalent basis. Labour cost growth eased slightly, while product prices edged down to 0.5%.
“Cost and price pressures in October are close to their historical long-run average rates,” Auld said.
However, she noted that high capacity utilisation — up to 83.4% — could see cost pressures re-emerge if activity remains strong.
While the employment index was flat in October, Auld said improving trading conditions and profitability should eventually lift labour demand.
“Improving trading conditions and profitability should eventually translate to labour demand, which should mean the labour market remains healthy in the near-term,” the NAB leader said.
Queensland recorded the strongest trend confidence, while Tasmania remained the weakest — although all states and territories are now in positive territory for the first time since September 2022.
Additional data from Westpac reinforces this momentum, with its Business Cashflow Gauge rising 0.9% in Q3as lower debt-servicing costs and a broadening industry recovery strengthen cashflow across Australian businesses.
Commercial firms are leading the improvement, while SME cashflow conditions remain stable but continue to recover.
NAB’s survey continues to send a consistent message: the economy’s private-sector upswing is holding, supported by easing costs, healthier margins, and robust utilisation rates.
The key risk, according to Auld, is whether stronger activity can be sustained without triggering a renewed rise in cost pressures.
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