Business confidence
Source: NAB Monthly Business Survey, April 2021.
  • NAB's Monthly Business Survey shows positive results for businesses
  • Business conditions reached a record high of +32 index points
  • Business confidence also set a new high, with all states recording increases

According to NAB‘s monthly business survey, business conditions rose in April, reaching a record high of +32 index points. This was driven by all sub-components which rose to their highest level on record. Trading rose 5 points to +40 index points, employment was up 7 points to +22 index points and profitability rose 8 points to +33 index points.

When breaking the data down by state, Western Australia once again led with the largest gains, offsetting the fall in Tasmania. Meanwhile, South Australia bounced back from a fall of around 9 index points in the previous two months.

Business conditions by state (net balance, trend)

Source: NAB Business Survey April 2021.

“It looks like we have moved past the rebound phase of the recovery and are now seeing healthy growth in most of the economy. After lagging in the rebound phase, the services sectors are now showing strength,” commented NAB’s chief economist, Alan Oster.

“Retail continues to see healthy conditions but does have slightly softer confidence than the other industries suggesting less improvement from the already high level in conditions.”

Alan Oster, NAB Chief Economist

Business confidence also set a new high, with all states recording a rise – which points to ongoing strength in conditions in the near term.

Business confidence by state (net balance, trend)

Source: NAB Business Survey April 2021.

Capacity utilisation reached a new high in the month at 85.3%. This was driven by large increases in the services industry but, as shown in the graph below, all sectors recorded increases above their long-run averages.

Capacity utilisation by industry (%)

Source: NAB Business Survey April 2021.

As supported by RBA figures, inflationary pressures remain very weak, but the strong capacity utilisation results suggest the nation is past the recovery stage and entering a period of strong growth.

“The pickup in capacity utilisation is very encouraging,” said Mr Oster.

 “It appears the economy has now more than recovered in a levels sense and if such high capacity utilisation is maintained, it is increasingly likely the expectations for business investment we have seen in our surveys and the ABS data will materialise.

“It should also result in ongoing employment growth.”

Capital expenditure (capex) also rose strongly, indicating strong expectations for capex in both the near and medium-term. These results are also starting to materialise in the latest ABS capex survey.

“This would be a big turnaround from the sluggish growth in business investment over recent years,” concluded Mr Oster.


For more information, the NAB Monthly Business Survey April 2021 report is available online.

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