Sydney, March 11, 2026, 08:46 AEDT
Australian business confidence dipped into negative territory for the first time in nearly a year, with National Australia Bank’s monthly survey showing sentiment at -1 in February. Despite the drop in confidence, conditions stayed unchanged at +7 and sales ticked higher.
Shares slid after the Reserve Bank of Australia bumped its cash rate up by 25 basis points—a quarter point—bringing the main policy rate to 3.85% as of Feb. 3. The timing is tight, coming just ahead of the RBA’s March 16-17 gathering. Governor Michele Bullock last week called March a “live meeting,” keeping investors alert. Reserve Bank of Australia
NAB, which leads the pack among Australia’s business lenders, saw the core of its business fire up this year. Saying it had “started 2026 strongly” on Feb. 18, the bank posted a 16% jump in first-quarter cash earnings to A$2.02 billion, according to Reuters, with business banking volumes up 7%. NAB News
Results came in uneven. Sales ticked higher to +12, profits stuck at +4, and hiring nudged down to +3. Forward orders—a signal on future demand—jumped 4 points, reaching a peak not seen since late 2022. Capital spending? It’s now at its strongest in three years.
Prices proved stubborn. According to NAB, purchase and labour costs both climbed 1.5% over the quarter, while retail price growth accelerated sharply—up to 1.0% from the previous 0.3%. That points to lingering inflation pressure.
Sally Auld, NAB’s chief economist, described the recent uptick in oil and gas as a textbook “energy shock,” pointing out that “energy prices feed into almost every part of the economy.” Bullock has flagged concerns at the central bank, saying they’re keeping an eye on whether inflation expectations might tick up if the Middle East conflict keeps pushing energy costs higher. NAB News
Other bank surveys painted a similar picture of household nerves. The Westpac-Melbourne Institute’s poll showed a 1.2% bump in consumer sentiment early March, but the index still couldn’t crack 100—pessimists continued to outweigh the optimists. ANZ’s weekly measure highlighted a pronounced slump in confidence as pump prices pushed higher. “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 noted. Reuters
The battle among banks hasn’t let up. Commonwealth Bank delivered record first-half cash profits back in February. Westpac and ANZ also topped first-quarter forecasts, highlighting the big four’s relentless pursuit of growth as they keep profitability and market share front and center.
The timing of the latest NAB survey complicates the picture. Conducted from Feb. 23 to March 2, it covers just the initial shock of the U.S.-Israeli strike on Iran and the immediate run-up in energy prices. March’s numbers could take a bigger hit if fuel and transport expenses keep pushing higher.
Auld is sticking with NAB’s call for another 25 basis point hike to 4.1% in May. That sort of bump would keep borrowers under pressure, extending the pain after the big four—NAB among them—pushed February’s increase straight onto variable-rate mortgage holders.
