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New data from the National Australia Bank (NAB) has shown a decline in business confidence, with its latest Monthly Business Survey revealing a significant drop in February 2026.
According to the index compiled by NAB Economics and Market Research, business confidence fell 4 points during the month to sit at -1 index points.
This leaves the index in negative territory for the first time in 11 months, after reaching a multi-year high in September 2025.
NAB noted this result likely reflected heightened caution following February’s rate hike.
Despite this, the data also showed that business conditions remained relatively flat.
In February, business conditions fell across all regions except NSW and Tasmania, but the index itself remained around the long-run average at +7 index points.
By industry, conditions were mixed, with four sectors showing improvement, while four others declined. In trend terms, all industries remain in positive territory except manufacturing.
NAB noted capacity utilisation held steady at 82.8 per cent, staying 1.5 percentage points above its long-term average.
Forward orders climbed 4 points in February, hitting their highest level since late 2022, reflecting strong activity in recent economic data.
Meanwhile, capital expenditure rose 3 points, marking its highest level in three years.
The survey was conducted prior to the recent crisis in the Middle East, meaning the results do not capture any potential impact from those events.
Demand for credit solutions
NAB’s latest findings highlight the continuing role finance brokers play in supporting business clients and follow Equifax’s finding that overall business credit demand rose 2.3 per cent year on year in the December 2025 quarter.
The data and technology company revealed that overall business credit demand rose 2.3 per cent year on year in the December quarter, with loan demand up 4.1 per cent and trade credit down 4.9 per cent compared with Q4 2024.
Large businesses have recorded significant increases in credit demand, with some sectors reporting trade credit growth of up to 19.4 per cent year-on-year.
At the time, Brad Walters, general manager, commercial at Equifax in Australia, noted mixed levels of inquiry from different business sizes.
“We’ve seen more inquiries from larger businesses, which often have more reserves and carry higher credit scores,” he said.
“This shift in the overall inquiry profile – where the larger players are currently more credit active than smaller players – is what I see driving this upward trend in credit quality.”
[Related: NAB chief economist: Business lending tells ‘positive story’]