Business conditions in Australia showed improvement in August 2025, according to the latest NAB Monthly Business Survey. The survey found that business conditions increased by two points during the month, with gains seen in both profitability and employment. Employment conditions were reported above their long-term average, while trading and profitability measures were close to average levels.
NAB Chief Economist Sally Auld commented on the findings: “The August survey result gives us confidence in our view that the outlook for businesses continues to improve. Both business confidence and conditions have normalised and are around their long-run averages.”
For Victoria, both business conditions and confidence turned positive in trend terms for the first time since May 2024. Across all states, business conditions either improved or remained steady, with South Australia and Western Australia experiencing the largest gains. Most industries saw improvements as well, including manufacturing and retail.
Auld added: “Regions and industries in the economy which have faced headwinds in recent years have showed positive signs in recent months, adding to our confidence that the broader economy is on a better trajectory in the second half of the year.”
Forward orders reached their highest level since May 2023 and are now around their long-run average. Cash flow also rose for a third consecutive month to be near its long-term trend.
Capacity utilisation increased to 83.1%, which is two percentage points above its long-run average. Capital expenditure rose by two index points to +10 index points. Growth in purchase costs slowed to 1.1% on a quarterly equivalent basis—the slowest pace since 2021—while labour cost growth eased to 1.5% and product price growth edged down to 0.6%.
“Capacity utilisation remains above average suggesting continued tightness in the supply/demand balance. That said, measures of costs and prices moderated in August, including purchase cost growth which fell to its lowest level since 2021,” Dr Auld said.
“Overall, the survey supports the view that the business outlook has become more positive in recent months, consistent with a better tone to official economic data of late.”
Further details can be found in the August edition of the NAB Monthly Business Survey.