Business confidence has been below zero since February. What a cautious buyer looks like from your side

Business confidence has been below zero in every NAB Monthly Business Survey since February, and in September it fell further, to minus 13. That says something about the people who buy businesses, not only about the people who run them.

What the September survey found

NAB released its September survey on 13 October 2026. Business confidence fell 4 points to minus 13 index points. NAB says that leaves it 18 points below its long run average, 22 points lower than a year ago, and in the bottom 5 per cent of readings in the survey's history. It was the third monthly fall in a row.

Business conditions, which NAB builds from trading, profitability and employment, were unchanged at minus 1, against a long run average of 7. Small rebounds in trading and profitability were offset by a 3 point fall in employment, taking that index to its lowest level in five years.

NAB's Head of Australian Economics, Gareth Spence, said "businesses are being hit from three directions". He named them as the interest rate and inflation outlook at home, ongoing global uncertainty, and elevated fuel and diesel costs.

How long it has been below zero

The run started in February, when confidence fell below zero for the first time in 11 months. NAB first reported minus 1 and has since revised February to minus 2. In March, as conflict broke out in the Middle East, it fell 29 points to minus 29, the lowest since April 2020. It recovered through April, May and June, to minus 5 in June as first reported, then fell for three months straight to September's minus 13. Every monthly reading from February to September has been negative.

The Queensland picture

NAB says Queensland conditions fell 4 points in September and that the state has now come back into line with New South Wales and Victoria, where conditions are weak. In trend terms, Queensland conditions were minus 1 and confidence minus 8. Western Australia was the outlier, with trend conditions at plus 16.

The cost squeeze

The number in the survey closest to a seller's own accounts is the gap between costs and prices. Purchase cost growth was 2.4 per cent at a quarterly rate in September. Final product prices grew 0.8 per cent. Labour costs grew 1.7 per cent. NAB says the gap between purchase costs and product prices continued to widen as businesses face pressure on margins.

If your gross margin slipped over the last year, you are not alone, and a buyer will know that. They will still want to see exactly what happened to yours, month by month, and what you did about it.

There is a second number worth noting. NAB says capacity utilisation eased to 82.3 per cent but stayed around 1 percentage point above its long run average. Businesses are still busy. Being busy and making money are different things this year, and a buyer reading your accounts will be looking for which one describes you.

What a cautious buyer looks like from your side

I am not going to tell you what this does to business prices. The survey does not measure them, and nobody can read a sale price off a confidence index. What it does describe is the frame of mind of the person across the table. A buyer who runs a business, or who is leaving a salary to buy one, has read the same headlines you have.

More diligence, and slower. A buyer who is uneasy about the economy checks more and takes longer to commit. Business Queensland lists what a buyer will want, including profit and loss statements for the past 24 to 36 months, a balance sheet, details of bank loans and lines of credit, and cash flow forecasts. In a nervous market, expect each one to be read closely rather than skimmed.

Harder questions about the last 12 months. Three years of accounts tell a buyer where the business has been. The last 12 months tell them whether it is holding up in this economy. Expect to be asked for monthly figures, not only annual ones. If your margin fell because costs rose faster than you could pass them on, have the explanation and the evidence ready: which costs moved, when your price rises went through, and what the months since look like.

A lender reading recent trading. Whoever finances the buyer is lending against earnings they expect to continue. When conditions are soft, the recent months carry more weight against the three year average, and a weak quarter needs a reason. Business Queensland notes that a buyer might have trouble securing finance and ask for a longer settlement. Build that possibility into your own timeline.

Some caution is about the buyer, not you. A buyer whose own business is under pressure may hold off whatever yours looks like. That is not a verdict on your business, and it is worth not taking it as one.

I wrote about the documents a buyer reaches for first in what buyers check first, and about the year a buyer will be reading now in your FY26 financials and what buyers see.

Both sides of it

The case for waiting. A soft market is a reason some owners hold off. If confidence and conditions recover, buyers may be more willing and lenders more relaxed, and a business with one weak year may read better with a stronger year behind it. That is a fair position, provided the time is used. I set out when waiting pays and when it costs in should I sell my business now or wait.

The case for preparing now. The same soft market is a reason other owners prepare. NAB's September commentary pointed to a risk that activity softens further through the final quarter of the year, and nobody knows when confidence turns. Preparation does not depend on that answer. Clean monthly accounts, documented add backs and a margin story with evidence behind it are worth having in any market. When buyers are cautious, a business that answers the questions quickly gives them fewer reasons to walk away.

Preparing and listing are separate decisions. You can do the first now and leave the second until the market, and you, are ready.

Where a broker fits

My job in a market like this is to know what a careful buyer and their lender will ask, and to have the answers assembled before they ask it. I do not forecast the economy, and you should be wary of anyone who sells you a forecast. What I can give you is a written market appraisal of where the business sits today, and the questions a buyer would raise about the last 12 months.

What to do

• Produce monthly profit and loss figures for the last 12 to 18 months, and check they reconcile to your BAS.
• Write a one page margin note. What your costs did, what you did about it, and when.
• Check your lease and finance dates. A buyer's lender will look at how long the lease has left to run.
• Run the free readiness check to see which of the twelve items a buyer tests are weakest.
• Decide preparation and timing separately. The first is in your hands now. The second can wait for a better read.