NAB Business Confidence in Australia falls to historic lows

Australia’s NAB Business Confidence Index fell to -13 in September, marking its third consecutive monthly decline. This reading is 18 points below its long-run average and ranks among the weakest 5% in the survey’s history. Gareth Spence, NAB Head of Australian Economics, noted that pessimism is widespread across industries, driven by higher interest rates, global uncertainty, and elevated fuel costs.

While business conditions remained stable at -1, the employment component saw a 3-point decline, reaching its lowest level in five years. Regional performance shows significant divergence: Western Australia remains a strong outperformer with trend conditions at +16, whereas Victoria sits at -3.

Despite the drop in sentiment, capacity utilisation remains relatively high at 82.3%, staying approximately one percentage point above its long-run average. This indicates an economy facing subdued business sentiment without a broad easing of capacity pressures. Investors are also monitoring how the Reserve Bank of Australia’s interest rate policies will impact bank margins and business growth.