NAB Business Survey

The NAB Business Survey is a private survey by National Australia Bank of business activity and expectations. The quarterly survey began in 1989, and the monthly survey started in March 1997. The quarterly survey probes conditions more deeply than the monthly survey and asks how firms see their industries.

It covers firms across the non-farm business sector by state and industry, and sample sizes vary with no fixed published size. Business Conditions tracks current activity, while Business Confidence tracks firms' outlook, and the survey is not official statistics, output or hiring data.

Monthly fieldwork runs over roughly the last week of the reference month and the first days of the next month. Quarterly fieldwork spans about 3 weeks around the end of the quarter. Monthly results are embargoed until 11:30am Sydney time on the second Tuesday after the reference month. Quarterly results are embargoed at the same time, about 3 to 5 weeks after the quarter ends, in January, April, July and October.

Each monthly release brings a key table, charts, a monthly theme and state and industry splits. The quarterly release adds expectations, spending plans and output constraints, and all data are subject to revision. NAB can bring a quarterly release forward when events move fast, and each report states the next release date.

Each reading reflects current activity parts, firms' outlook, costs and prices.

• Trading conditions: captures firms' sales environment and is often the strongest of the 3 parts.
• Profitability: captures profit outcomes and is often the weakest when costs squeeze margins.
• Employment: captures hiring outcomes and NAB reads it as a signal for jobs growth.
• Business Confidence: captures firms' outlook and can move against Conditions.
• Forward orders, stocks, exports, capital expenditure and cash flow: track demand and coming activity, with forward orders the leading read.
• Labour costs, purchase costs, final product prices, retail prices: track cost and price pressure. Capacity utilisation and borrowing conditions: track operating and funding pressure.

In the March 2020 survey, released April 14, 2020, both headlines saw their largest monthly falls on record. Confidence fell to -66 index points, its lowest ever. Conditions fell to -21 index points as all 3 parts dropped, with profitability weakest at -27 index points. Forward orders collapsed to a record low and capacity utilisation hit its lowest ever.

NAB read the fall in orders and conditions as implying a large fall in gross domestic product (GDP) over the next 6 months. Confidence sat far below conditions because outlook leads realised activity.

1. Net balance: firms say if outcomes were higher or lower, and each indicator is the higher share minus the lower share. For example, 45% higher and 25% lower gives +20 index points.
2. Index points and positive and negative territory: zero is neutral, positive means more improvers and negative means more decliners.
3. Average: Business Conditions is the mean of the 3 parts, computed from unrounded data. For example, legs of +20, +5 and +5 give (20 + 5 + 5) / 3 = +10 index points.
4. Seasonal adjustment: all data are seasonally adjusted and subject to revision, except quarterly purchase costs and exports. Next 12 months expectations are not seasonally adjusted, and releases show trend lines with long run averages. For example, the historical confidence average is 6 index points and the quarterly conditions average is 2.