NAB Business Survey January 2026 – Confidence edges up but conditions fall

11 February 2026

• Confidence lifted, conditions eased but remain above trend.
• Services lead the economy. Activity broadened across retail, wholesale and construction; capacity still high.
• Cost and price growth hit post‑pandemic lows as momentum holds. 

Watch

NAB Senior Economist, Taylor Nugent spoke with the ABC News on the January survey results.

Watch the video: NAB survey reveals 'encouraging' signs inflation is easing in the economy - ABC News

Summary

Business confidence rose 1pt in January but remains just below its long-run average. Business conditions fell 3pts (unrounded) in the month, driven by declines in trading conditions and profitability. That said, in trend terms they continue to track at a level a little above average – broadly consistent with trend growth in the economy.

The services industries continue to show the most strength, though wholesale and retail improved somewhat in H2 2025, while construction industry is also stronger than in late 2024. Capacity utilisation has declined 0.6ppt from its recent peak, but it remains high. Capacity utilisation was above average in 6 of 8 industries (with manufacturing and mining the exceptions).

Of note, measures of cost and price growth in the survey fell to new post-pandemic lows though reported input costs continue to outpace output price increases.

Overall, the January survey showed the economy has retained most of its momentum gained through the past year and the level of activity remains high, notwithstanding some easing in capacity utilisation over recent months. Encouragingly, price pressures continue to moderate gradually, while private sector activity has held up.

Details

• Business confidence rose 1pt to 3 index points. Confidence softened in late 2025 but remains above levels seen through 2023 and 2024 when private sector growth was soft.
• Business conditions fell 3pts (unrounded) to +7 index points, more than retracing December’s gain. Trading conditions fell 6pts and profitability was down 3pts after both increasing in the previous month. The employment sub-component was unchanged for the third consecutive month.
• By industry, conditions fell across all but finance, property & business services and transport & utilities. In trend terms, conditions were weakest in retail and manufacturing. The decline in labour cost growth was driven by the retail industry after a spike in December unwound. Final prices growth slowed the most in mining and recreation & personal services industries.
• By State, the fall in conditions was driven by SA retracing outsized gains from December and a large fall in Tas. Trend conditions now sit broadly in line across the states however NSW and Vic lag marginally.
• Capacity utilisation eased further to 82.9%, down from recent highs but still 1.5ppts above its long-run average. Forward orders more than retraced the December fall and sits at +2 index points. The series continues to trend up, consistent with improving economic conditions over the past year.

Purchase cost growth slowed to 1.1% in quarterly equivalent terms and labour cost growth fell to 1.3%. Product price growth and retail prices growth fell to 0.5% and 0.3% respectively. All costs and prices growth measures sit at their lowest levels since 2021.

Read the full January NAB Monthly Business Survey.

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