Australia’s NAB Business Confidence Index plunged to -29 in March 2026 from an upwardly revised zero in the prior month, marking the second-largest monthly drop on record and the weakest reading since April 2020. The sharp deterioration reflected fallout from the Iran war, which triggered a global oil shock and weighed heavily on sentiment. Despite collapsing confidence, business conditions held steady at 6. Sales edged lower (11 vs 12), while profitability weakened (1 vs 4), highlighting margin pressures as input costs surged 3% q/q. Firms appear unable to fully pass on higher costs, with retail price growth easing to 0.5% from 0.9%, signaling softer pricing power. The Reserve Bank raised its policy rate for a second time in March to 4.1%, partially reversing last year’s easing. With fuel costs surging amid Middle East tensions, the central bank warned headline inflation could climb to around 5% in Q2, underscoring the already challenging outlook for businesses.
