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.
Australian business confidence declined further in September due to soaring oil prices caused by renewed tensions in the Middle East, according to a survey published on Tuesday. The National Australia Bank's index of business conditions remained flat at -1 for the month, but the ongoing drop in confidence indicates that overall conditions are likely to worsen, the survey indicated. Confidence tumbled 4 points to -13, a significant drop from February's level, prior to the US-Israeli conflict with Iran.
Energy costs have risen, fueling higher funding costs, and domestic growth has slowed in 2026, according to the NAB. Consequently, both business confidence and business conditions are now well below their long-term averages. Over the month, confidence declined in five out of eight industries. Mining, wholesale, and retail sectors experienced a slight improvement in sentiment, although overall confidence remained negative in all sectors except mining, the NAB reported.
Global oil prices saw extreme volatility in September following missile and drone strikes by Iran-backed Houthis against Saudi Arabia. The conflict is a result of broader US-Iran tensions and has led to higher oil prices, raising concerns about persistent inflation. The Reserve Bank of Australia raised its cash rate to a 15-year high of 4.60% in the previous month, its fourth hike of the year, and warned it may need to tighten further to curb inflation.
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