In the latest NAB Monthly Business Survey for March 2025, it was reported that business conditions remained relatively stable, with a slight increase in profitability offset by lower trading conditions and employment figures. Despite this, confidence levels experienced a slight decline, remaining in negative territory. The survey indicated that most measures remained steady, with improvements noted in forward orders and capital expenditure. Notably, capacity utilisation increased from 82.0% to 82.9% during the month.
The rise in capacity utilisation was primarily driven by growth in industries related to goods production, including mining, transport, utilities, construction, and manufacturing. Conversely, consumer-facing and service industries reported stable utilisation rates. Price pressures were consistent in March, with minor decreases observed in labour and retail costs. Overall, the survey revealed a sense of caution among businesses regarding the future outlook, with confidence levels remaining negative.
Chief Economist Sally Auld commented on the survey findings, noting that while business conditions saw improvements in most sectors, construction, retail, and recreation & personal services experienced declines. Dr. Auld emphasized that business confidence, though mixed across industries, remained below the long-term average. She highlighted the impact of the impending tariff announcements on future business sentiment.
Despite the overall cautious sentiment, the survey indicated positive movements in forward orders and capital expenditure, both showing a 1-point increase. The uptick in capacity utilisation to 82.9% marked the highest rate since September 2024, driven by the performance of goods production industries. Purchase cost growth remained steady at 1.4%, while labour cost growth saw a slight decline. Final product price growth was also stable at 0.5%.
Dr. Auld reiterated the prevailing caution among businesses, citing below-average confidence and conditions. She pointed out the need to monitor the impact of recent tariff announcements on future business sentiment. The survey was conducted before the significant changes in US trade policy announced in early April, indicating that subsequent surveys may provide a clearer picture of the evolving business landscape.
Businesses are advised to stay informed and adapt to the changing economic environment. The NAB Monthly Business Survey serves as a valuable tool for understanding industry trends and making informed decisions. As global economic conditions continue to shift, businesses must remain agile and responsive to maintain competitiveness and sustainability in the market.
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