As Australia’s largest business bank, NAB has always been in a unique position to understand business, and their business surveys allow them to capture what’s on the minds of business owners and managers over time.  

When trying to comprehend just how big a deal COVID-19 was to Australia’s economy and businesses, they needed to look no further than NAB’s business surveys from that period. 

 You’ll see that business confidence levels plummeted to around -90 just weeks after Australia’s first confirmed case of COVID. Business conditions, meanwhile, hit a low of -38.  

 To put this in perspective, confidence levels only dropped to -30 during the GFC, despite the economic chaos it wreaked, while business conditions bottomed out at a mere -15.  

 As NAB Group Chief Economist Alan Oster says, “The depth of the COVID slowdown was frightening.” 

Information you can count on 

When it comes to recording business sentiment across crises like the pandemic – and many other seismic events – NAB’s business surveys have been going strong for 35 years.  

Quite simply, business confidence and conditions are important markers for Australia’s economic outlook. So too are the other indicators covered in NAB’s business surveys, such as forward orders, capacity utilisation and product and labour costs.  

As Oster explains, that’s because they give us a real-time snapshot of where our economy is at and what’s likely to happen next.  

“Essentially there’s this almost instant feedback through all our different measures to events. They give us a really interesting and up-to-date version of where the economy is traveling right now.” 

Which makes NAB’s business surveys an invaluable tool for business planning. By understanding how others are feeling and responding to the current conditions, businesses are better able to stay one step ahead of their competitors. 

They can also see how other states are doing. That geographic overlay can help them make decisions about where they might invest or open an office or manufacturing plant. 

The survey is open to businesses large or small who want to share their views and have their voice heard. 

“I’d encourage any business regardless of whether they are our customers, not currently participating in the survey, to reach out and we would welcome them as respondents”, said Mr. Oster. 

“The survey itself takes only a few minutes to fill in and along with receiving a copy of the survey on the day of release, we are planning some key insight events for those who help us by completing it.” 

History helps with perspective 

 Take this month’s business survey. You may be concerned about the economic outlook just now, but its results – business confidence at -3 and business conditions at +2 – can help you keep things in perspective.   

As Oster notes, historically both numbers aren’t that bad. “Confidence is a little below average, but these figures aren’t even close to the levels we saw during the height of COVID or the GFC.  

“That means we can say, ‘Yes, it’s tough right now – some parts of the economy are doing better, but some parts are really suffering. However, overall, things are okay – not great, but okay.” 

Riding the highs and the lows 

And it’s good to remember that business confidence and conditions don’t always go hand in hand. After the 9/11 attacks on the World Trade Center, for instance, there was a huge fall in confidence, but conditions held up.  

As Oster says, “Once businesses saw the world wasn’t coming to an end and the economy hadn’t fallen over – some three or four months down the track – confidence returned.”  

It makes sense. Business confidence is rooted in emotions; the numbers can just as easily swing in either direction.  

Again, the GFC is a good example. Ultimately, Australia’s businesses did relatively well during that crisis and there was a sharp rise in confidence as a result.  

“Sometimes you get these surges after a negative event and that’s what happened with the GFC,” Oster explains. “As it faded, business confidence jumped up to about 80+, while conditions reached 10+.” 

A record for the times 

NAB’s business surveys have been an important point of reference for economists and businesses alike over these 35 years.  

As former Reserve Bank Governor Glenn Stevens once noted, if he only had two pieces of information to run the RBA on, the first one he would pick was the NAB business survey’s monthly data.  

That confidence is a point of pride for Oster, who has been an inseparable part of NAB’s business surveys since they first began. And it’s why NAB is proud to publish them. Put simply: they matter.  

Currently, NAB is looking for businesses with an annual turnover of more than $2 million to participate in the survey.