Sydney, March 11, 2026, 08:46 AEDT
National Australia Bank’s monthly business survey showed confidence among Australian firms slipped below zero in February for the first time in 11 months, even as overall conditions held steady. Confidence fell to -1, while conditions held at +7 and sales improved. 1
The drop comes after the Reserve Bank of Australia lifted the cash rate, the benchmark policy rate, by 25 basis points, or a quarter of a percentage point, to 3.85% on Feb. 3. It also lands days before the RBA’s March 16-17 meeting, after Governor Michele Bullock said last week that March would be a “live meeting”. 2
For NAB, Australia’s top business lender, the numbers go straight to the heart of its main franchise. The bank said on Feb. 18 it had “started 2026 strongly”, and Reuters reported first-quarter cash earnings, a bank profit measure, rose 16% to A$2.02 billion as business banking volumes climbed 7%. 3
The detail was mixed. Sales edged up to +12, profits held at +4 and employment slipped to +3, while forward orders, a guide to future demand, rose 4 points to their highest since late 2022 and capital spending hit a three-year high. 4
The stickier part was prices. NAB said purchase costs and labour costs each rose at a quarterly pace of 1.5%, and retail price growth jumped to 1.0% from 0.3%, suggesting inflation pressure has not fully eased. 4
NAB Chief Economist Sally Auld called the latest rise in oil and gas prices a classic “energy shock” and warned that “energy prices feed into almost every part of the economy.” Bullock has also cautioned that the central bank is watching whether inflation expectations start to drift higher if the Middle East conflict keeps energy costs elevated. 5
Other bank surveys suggested households were uneasy too. A Westpac-Melbourne Institute poll found consumer sentiment rose 1.2% in early March but stayed below 100, the line where pessimists outnumber optimists, while ANZ’s weekly survey showed a sharp drop in confidence as petrol prices climbed. “Responses from those surveyed in the last three days were consistent with an index read of just 84,” Westpac’s head of Australian macro-forecasting Matthew Hassan said. 6
Competition in banking has not eased. Commonwealth Bank posted record first-half cash earnings in February, while Westpac and ANZ both beat first-quarter estimates, underlining how hard the big four are still pushing for growth as profitability and market share stay in focus. 7
But the latest NAB survey may not be the whole story. It was run from Feb. 23 to March 2, so it captured only the opening phase of the U.S.-Israeli attack on Iran and the jump in energy prices, leaving March’s reading vulnerable if fuel and transport costs keep rising. 1
Auld said NAB’s forecast for another quarter-point increase to 4.1% in May was unchanged. A move like that would leave borrowers facing higher rates for longer after the big four, including NAB, already passed February’s increase through to variable-rate home loan customers. 5
