The NAB business survey for Australia showed steady conditions but a sharp deterioration in sentiment in February after officials at the Reserve Bank of Australia continued to tighten policy early in the month. More up-to-date consumer confidence data also released today (the Westpac-Melbourne Institute Index of Consumer Sentiment) showed consumer sentiment remained steady but weak at the start of March.

The NAB survey's business conditions index fell from 18 in January to 17 in February, with respondents reporting steady trading conditions and stronger employment, but weaker profitability and forward orders. The survey also shows stronger growth in labour costs but a smaller increase in retail prices, consistent with the RBA's assessment that price pressures likely peaked around the turn of the year. The survey's business confidence index fell sharply from 6 in January to minus 4 in February, largely driven by the wholesale, recreation and personal services, and finance, business and property industries.

The National Australia Bank (NAB) Business Survey is based on a survey of around 500 firms across the non-farm business sector on their assessment of current business conditions and their sentiment about the outlook. The survey's business conditions index covers trading, profitability, employment, forward orders, stocks, and exports, with respondents also providing responses on changes in costs and selling prices. The survey is conducted in the second half of each month.

The survey of business conditions and confidence offers timely updates on how Australian companies are performing and reacting to unfolding events including news about the overall economy and policy developments. as well as moves in the stock market and changes in interest rates. Investors can use the data to help forecast economic activity and better understand how business conditions and expectations affect sales, employment, investment and other economic outcomes.