Business confidence falls sharply, NAB survey finds

The cost of doing business in Australia is too high to handle for many organisations, the latest business confidence survey has found.

Business confidence has fallen sharply, National Australia Bank’s monthly survey finds.

Inflation continues to grind down on future work pencilled in for the mining and retail sectors, wiping out a general boost to business confidence in October.

The goods production and distribution sectors, particularly manufacturing and retail, have the weakest confidence, but services sectors remain significantly stronger.

“Confidence fell sharply in November and is now back below average” NAB chief economist Alan Oster said.

Retail, along with mining, are among the least confident sectors in the country. Picture: NewsWire/ Monique Harmer

“While we were optimistic last month, it appears the trend of well below-average confidence remains intact.

“The forward-looking indicators in the survey remain weak.”

However, businesses are reporting inflation is easing, with input cost increases slowing.

“Labour cost growth was unchanged at 1.4 per cent in quarterly equivalent terms, while purchase cost growth edged up to 1.1 per cent in quarterly equivalent terms,” Mr Oster said.

“Input cost growth has slowed through 2024.”

Economic growth continues to tread water in Australia. Picture: NewsWire / Valeriu Campan

Productivity remains weak across the Australian economy, as shown in the most recent national accounts data. Gross domestic product grew just 0.3 per cent for the latest quarter, and the nation has gone backwards in per-capita GDP terms for 21 months, leaving Australians poorer.

Mr Oster said businesses couldn’t get running under full steam because of price constraints.

“Capacity utilisation continues to gradually trend lower but was unchanged and above average in November,” he said.

“Capacity utilisation remains an important dynamic with the growth in activity continuing to look weak but the level of activity remaining high.”

Originally published as Business confidence falls sharply, NAB survey finds