Australia business confidence falls further in September amid oil price volatility

SYDNEY: Australian business conditions were broadly unchanged in September, though confidence slipped further amid a surge in oil prices driven by renewed tensions in the Middle East, raising concerns over higher costs, a survey showed on Tuesday.

The survey from National Australia Bank showed its index of business conditions was flat at -1 in September. However, the ongoing decline in confidence suggests that conditions will likely deteriorate further, the survey said.

Confidence fell 4 points to -13, well below the level recorded in February, before the US-Israeli conflict with Iran began.

"Energy prices remain elevated, funding costs have risen and domestic growth has slowed in 2026," NAB said.

"Against this backdrop, it is not surprising that both business confidence and business conditions are well below their respective long-run averages."

Over the month, business confidence fell in five out of eight industries. Mining, wholesale and retail saw "some improvement" in sentiment, though in trend terms, confidence remains negative across all industries except mining, NAB said.

Global oil prices experienced extreme volatility in September after Yemen's Iran-backed Houthis launched missile and drone strikes against Saudi Arabia. The conflict, now a spillover of the broader US-Iran tensions, has driven oil prices higher, fuelling fears of persistent inflation.

The Reserve Bank of Australia last month raised its cash rate to a 15-year high of 4.60 per cent - its fourth hike of the year - and warned it may have to tighten further to curb inflation.