Australia’s NAB Business Confidence Index edged up to 3 in January 2026, from a downwardly revised 2 in December, reaching its highest level since October. In contrast, business conditions softened, slipping to 7 from 9, as both sales (down to 10 from 16) and profits (down to 8 from 11) declined, while employment remained unchanged at 4 for the third consecutive month.
On the cost side, pressures continued to ease for both labour and inputs, and quarterly growth in retail prices slowed further to 0.3%, from 0.5% in December. NAB economist Michael Hayes noted that “measures of cost and price growth in the survey fell to new post-pandemic lows.” He added that “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,” even though capacity utilisation has moderated somewhat in recent months.
The survey was completed before the RBA raised the cash rate by 25 basis points to 3.85% last week, its first increase in two years.
