NAB Monthly Business Survey August 2025 - confidence continues to lift

Published on 10.09.2025

• Business conditions up, driven by jobs and profits; forward orders positive for first time in 2 years
• Confidence dipped, but remains near average; manufacturing and retail improved
• Cost growth eased, with purchase costs at slowest pace since 2021

Business sentiment continues to brighten, with NAB’s August 2025 Monthly Business Survey pointing to a more positive outlook in line with recent improvements in official economic data.

Business conditions rose 2pts in August driven by gains in profitability and employment. Employment conditions are above their long run average while both trading and profitability subcomponents sit close to their averages.

“The August survey result gives us confidence in our view that the outlook for businesses continues to improve” said NAB Chief Economist Sally Auld. “Both business confidence and conditions have normalised and are around their long-run averages”.

Both business conditions and confidence in Victoria were positive in trend terms for the first time since May 2024. Business conditions in trend terms either improved or remained steady across all states, with the largest gains occurring in South Australia and Western Australia. In trend terms, most industries saw an improvement in conditions, including manufacturing and retail.

“Regions and industries in the economy which have faced headwinds in recent years have showed positive signs in recent months, adding to our confidence that the broader economy is on a better trajectory in the second half of the year," she said.

Forward orders in trend terms reached their highest level since May 2023 and now sit around their long run average. Cash flow rose, in trend terms, for its third consecutive month and is also now around its long run average.

Capacity utilisation rose to 83.1%, to be above the long run average by 2ppts, while capex increased 2pts to +10 index points. Purchase cost growth eased to 1.1% in quarterly equivalent terms, while labour cost growth slowed to 1.5% and product price growth edged down to 0.6%.

“Capacity utilisation remains above average suggesting continued tightness in the supply/demand balance. That said, measures of costs and prices moderated in August, including purchase cost growth which fell to its lowest level since 2021," Dr Auld said.

“Overall, the survey supports the view that the business outlook has become more positive in recent months, consistent with a better tone to official economic data of late.”

Read more in the August edition of the NAB Monthly Business Survey (PDF, 733KB), opens in new window.