Business Conditions and Sentiments

Latest release

Insights into Australian business conditions and sentiments

Reference period

May 2026

Released

26/05/2026

Release date and time

26/05/2026 11:30am AEST

Key statistics

One in six businesses (16%) were experiencing supply chain disruptions in May 2026.
Almost three quarters (72%) of businesses reported current fuel prices or availability were having a negative impact on their business.
60% of businesses made changes to business operations as a result of current fuel prices or availability, with 48% of businesses absorbing costs.

This is the first Business Conditions and Sentiments release since June 2022. The survey was reinstated to provide insights on changing business behaviour and sentiments in response to fuel prices or availability impacted by the closing of the Strait of Hormuz.

The survey was conducted between 4 May and 15 May.

In responding to the survey, businesses are asked to provide a best estimate only, without accessing records or reports.

Business size categories used in this release:

Small (0-19 persons employed);
Medium (20-199 persons employed); and
Large (200 or more persons employed).

For information on survey sample, response rates and the questionnaire, see Methodology.

Supply chain disruptions

Businesses were asked if they were currently experiencing any supply chain disruptions. A supply chain is a logistics network between a business and its suppliers to produce and distribute a product to customers. Supply chain disruptions refer to difficulty in getting the materials needed to produce and sell goods and services.

One in six businesses (16%) are currently experiencing supply chain disruptions.

Agriculture, forestry and fishing (42%) reported the highest proportion of businesses experiencing supply chain disruptions in May 2026, followed by Retail trade (31%), Accommodation and food services (25%) and Wholesale trade (24%).

Businesses experiencing supply chain disruptions, by industry(a)
	Proportion of businesses (%)
Agriculture, forestry and fishing	42
Retail trade	31
Accommodation and food services	25
Wholesale trade	24
Manufacturing	21
Transport, postal and warehousing	18
Information media and telecommunications	17
Arts and recreation services	16
Administrative and support services	15
Construction	14
Other services	14
Rental, hiring and real estate services	10
Electricity, gas, water and waste services	9
Professional, scientific and technical services	9
Financial and insurance services	5
Education and training	5
Health care and social assistance	4
Mining	3

Businesses experiencing supply chain disruptions, by industry(a)

["","Proportion of businesses"]

[["Agriculture, forestry and fishing","Retail trade","Accommodation and food services","Wholesale trade","Manufacturing","Transport, postal and warehousing","Information media and telecommunications","Arts and recreation services","Administrative and support services","Construction","Other services","Rental, hiring and real estate services","Electricity, gas, water and waste services","Professional, scientific and technical services","Financial and insurance services","Education and training","Health care and social assistance","Mining"],[[42],[31],[25],[24],[21],[18],[17],[16],[15],[14],[14],[10],[9],[9],[5],[5],[4],[3]]]

[]

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(a) Proportion of responding businesses.

Businesses with supply chain disruptions provided information about the extent to which they were being affected:

39% were affected to a great extent (e.g. major delays / cannot obtain certain items and significant impact on revenue)
57% were affected to a small extent (e.g. some delays but little impact on revenue)
3% were not affected at all.

Impact of fuel prices or availability

Almost three quarters (72%) of businesses reported fuel prices or availability were having a negative impact on the business in May 2026.

Industries which had the highest proportion of businesses reporting a large negative impact due to current fuel prices or availability included:

Transport, postal and warehousing – 55%
Agriculture, forestry and fishing – 51%
Accommodation and food services – 45%.

Businesses negatively impacted by fuel prices or availability, by industry(a)(b)
	Proportion of businesses (%)
Manufacturing	87
Transport, postal and warehousing	86
Wholesale trade	85
Accommodation and food services	85
Agriculture, forestry and fishing	83
Other services	78
Construction	75
Health care and social assistance	75
Retail trade	74
Arts and recreation services	74
Mining	69
Information media and telecommunications	63
Administrative and support services	63
Professional, scientific and technical services	62
Electricity, gas, water and waste services	61
Financial and insurance services	55
Education and training	54
Rental, hiring and real estate services	53

Businesses negatively impacted by fuel prices or availability, by industry(a)(b)

["","Proportion of businesses"]

[["Manufacturing","Transport, postal and warehousing","Wholesale trade","Accommodation and food services","Agriculture, forestry and fishing","Other services","Construction","Health care and social assistance","Retail trade","Arts and recreation services","Mining","Information media and telecommunications","Administrative and support services","Professional, scientific and technical services","Electricity, gas, water and waste services","Financial and insurance services","Education and training","Rental, hiring and real estate services"],[[87],[86],[85],[85],[83],[78],[75],[75],[74],[74],[69],[63],[63],[62],[61],[55],[54],[53]]]

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(a) Proportion of responding businesses.
(b) Includes both large negative impact and small negative impact.

Impact on business operations

In May 2026, 60% of responding businesses made changes to business operations due to fuel prices or availability:

48% absorbed cost increases
11% increased prices
6% changed or delayed production targets, schedules or volumes
6% implemented a fuel surcharge or levy.

Businesses in Agriculture, forestry, fishing (72%), Manufacturing (67%), Construction (64%) and Wholesale trade (60%) were most likely to absorb cost increases, and those in Transport, postal and warehousing (36%) and Wholesale trade (17%) were most likely to implement a fuel surcharge or levy in response to current fuel prices.

Businesses in Agriculture, forestry and fishing (28%) and Manufacturing (20%) were most likely to change or delay production targets, schedules or volumes.

The industries where businesses were least likely to make changes to business operations in response to fuel prices or availability were Financial and insurance services (60%), Health care and social assistance (59%) and Electricity, gas, water and waste services (58%).

Changes made to business operations in response to fuel prices or availability(a)(b)
	Proportion of businesses (%)
Absorbed cost increases	48
Increased prices	11
Changed or delayed production targets, schedules or volumes	6
Implemented a fuel surcharge or levy	6
Other	4
Changed operating hours	3

Changes made to business operations in response to fuel prices or availability(a)(b)

["","Proportion of businesses"]

[["Absorbed cost increases","Increased prices","Changed or delayed production targets, schedules or volumes","Implemented a fuel surcharge or levy","Other","Changed operating hours"],[[48],[11],[6],[6],[4],[3]]]

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(a) Proportion of responding businesses.
(b) Businesses could choose more than one option.

Impact on workforce

Just over one in four businesses (28%) made changes to their workforce in response to current fuel prices or availability:

15% reduced or suspended non-essential travel activities to reduce fuel consumption
9% made reductions to the size of their current workforce.

Of those businesses that made changes to the workforce, businesses in Accommodation and food services (33%) were most likely to reduce the size of their current workforce, whereas businesses in Agriculture, forestry and fishing (33%), Mining (20%), Professional, scientific, and technical services and Manufacturing (both 18%) were most likely to reduce or suspend non-essential travel activities.

Medium sized businesses were most likely to reduce the size of their workforce (13%) compared to small and large businesses (9% and 3% respectively).

Changes made to workforce in response to fuel prices or availability(a)(b)(%)
	Small businesses	Medium businesses	Large businesses	All businesses
Reduced size of current workforce	9	13	3	9
Reduced or suspended non-essential travel activities to reduce fuel consumption	15	15	12	15
Encouraged staff to work from home/remotely or carpool to reduce commuting costs	5	7	7	5
Changed rosters to reduce daily travel	6	6	2	6
Changed rebates or allowances for employees who use their own vehicle for work purposes	1	4	3	1
Other	3	2	4	3
No changes made	69	63	74	68
Don't know	4	5	4	4

(a) Proportion of responding businesses.
(b) Changes made in the past four weeks. With the exception of 'No changes made' and 'Don't know', businesses could select more than one response.

Impact on capital investment plans

Businesses were asked whether they had cancelled or delayed capital investment plans over the past four weeks in response to current fuel prices or availability.

In May 2026, one in six businesses (17%) reported delaying or cancelling capital investment plans due to fuel prices or availability.

Wholesale trade and Agriculture, forestry and fishing had the highest proportion of businesses who reported they had delayed or cancelled capital investment plans (32% and 31% respectively), followed by Transport, postal and warehousing (25%) and Manufacturing (23%).

Approximately 9% of businesses were unsure whether they had delayed or cancelled capital investment plans, and this was consistent across small, medium and large businesses (9%, 10% and 9% respectively).

Delayed or cancelled capital investment plans in response to fuel prices or availability, by industry(a)(b)
	Proportion of businesses (%)
Wholesale trade	32
Agriculture, forestry and fishing	31
Transport, postal and warehousing	25
Manufacturing	23
Accommodation and food services	20
Rental, hiring and real estate services	20
Construction	16
Professional, scientific and technical services	16
Other services	16
Retail trade	14
Education and training	13
Financial and insurance services	12
Administrative and support services	12
Information media and telecommunications	11
Mining	10
Health care and social assistance	10
Arts and recreation services	5
Electricity, gas, water and waste Services	1

Delayed or cancelled capital investment plans in response to fuel prices or availability, by industry(a)(b)

["","Proportion of businesses"]

[["Wholesale trade","Agriculture, forestry and fishing","Transport, postal and warehousing","Manufacturing","Accommodation and food services","Rental, hiring and real estate services","Construction","Professional, scientific and technical services","Other services","Retail trade","Education and training","Financial and insurance services","Administrative and support services","Information media and telecommunications","Mining","Health care and social assistance","Arts and recreation services","Electricity, gas, water and waste Services"],[[32],[31],[25],[23],[20],[20],[16],[16],[16],[14],[13],[12],[12],[11],[10],[10],[5],[1]]]

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(a) Proportion of responding businesses.
(b) Changes made in the past four weeks.

Need for assistance or support

Businesses were asked whether they needed assistance or support in response to fuel prices or availability, and if so, whether they intended to seek assistance or support in the next four weeks.

Almost one in six (16%) businesses indicated they needed assistance or support in response to fuel prices or availability in May 2026.

Of those that indicated assistance or support was needed, 13% indicated financial assistance or support was needed, and 3% reported a need for advisory assistance or support.

Businesses needing assistance or support(a)(b)(%)
		Small businesses	Medium businesses	Large businesses	All businesses
Assistance or support needed(b)
	Financial	14	11	7	13
	Advisory	3	4	1	3
	Other	2	1	3	2
No assistance or support needed		69	72	78	70
Don't know		14	15	11	14

(a) Proportion of responding businesses.
(b) With the exception of 'No assistance or support needed' and 'Don't know', businesses could select more than one response.

Businesses needing financial assistance or support was highest in Agriculture, forestry and fishing (23%) and Transport, postal and warehousing (22%).

Small businesses were more likely to need financial assistance or support (14%) compared to medium and large businesses (11% and 7% respectively).

Of those businesses that indicated assistance or support was needed almost half (43%) indicated they would seek assistance in the next four weeks. Small and medium businesses (42% and 48% respectively) were more likely to seek assistance or support in the next four weeks compared to large businesses (31%).

Changes in business revenue

Businesses were asked to provide an indication of how revenue had changed over the past four weeks and expected to change over the next four weeks. Businesses were asked to provide a best estimate only.

In May 2026, just over one third (36%) of businesses reported revenue had decreased over the previous four weeks. Businesses in Accommodation and food services (53%), Wholesale trade (48%), Transport, postal and warehousing (47%) and Information media and telecommunications (46%) were most likely to indicate business revenue had decreased over the past four weeks.

Businesses reporting revenue decreased, by industry(a)(b)
	Proportion of businesses (%)
Accommodation and food services	53
Wholesale trade	48
Transport, postal and warehousing	47
Information media and telecommunications	46
Retail trade	45
Manufacturing	42
Administrative and support services	39
Agriculture, forestry and fishing	35
Arts and recreation services	35
Construction	34
Other services	34
Professional, scientific and technical services	33
Rental, hiring and real estate services	32
Education and training	28
Health care and social assistance	26
Financial and insurance services	22
Electricity, gas, water and waste services	15
Mining	12

Businesses reporting revenue decreased, by industry(a)(b)

["","Proportion of businesses"]

[["Accommodation and food services","Wholesale trade","Transport, postal and warehousing","Information media and telecommunications","Retail trade","Manufacturing","Administrative and support services","Agriculture, forestry and fishing","Arts and recreation services","Construction","Other services","Professional, scientific and technical services","Rental, hiring and real estate services","Education and training","Health care and social assistance","Financial and insurance services","Electricity, gas, water and waste services","Mining"],[[53],[48],[47],[46],[45],[42],[39],[35],[35],[34],[34],[33],[32],[28],[26],[22],[15],[12]]]

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(a) Proportion of responding businesses.
(b) Over the past four weeks.

Expectation of revenue over next four weeks

More than one quarter (27%) of businesses reported they expect revenue to decrease over the next four weeks. Wholesale trade (51%), Retail trade (41%), Accommodation and food services (36%), and Agriculture, forestry and fishing (35%) had the highest proportion of businesses expecting revenue to drop over the next four weeks.

Businesses reporting a decrease in expected revenue, by industry(a)
	Proportion of businesses (%)
Wholesale trade	51
Retail trade	41
Accommodation and food services	36
Agriculture, forestry and fishing	35
Information media and telecommunications	34
Construction	31
Administrative and support services	29
Transport, postal and warehousing	28
Professional, scientific and technical services	27
Manufacturing	26
Rental, hiring and real estate services	22
Mining	21
Education and training	17
Other services	16
Financial and insurance services	15
Health care and social assistance	14
Arts and recreation services	14
Electricity, gas, water and waste services	13

Businesses reporting a decrease in expected revenue, by industry(a)

["","Proportion of businesses"]

[["Wholesale trade","Retail trade","Accommodation and food services","Agriculture, forestry and fishing","Information media and telecommunications","Construction","Administrative and support services","Transport, postal and warehousing","Professional, scientific and technical services","Manufacturing","Rental, hiring and real estate services","Mining","Education and training","Other services","Financial and insurance services","Health care and social assistance","Arts and recreation services","Electricity, gas, water and waste services"],[[51],[41],[36],[35],[34],[31],[29],[28],[27],[26],[22],[21],[17],[16],[15],[14],[14],[13]]]

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(a) Proportion of responding businesses. Businesses were asked to indicate changes to expected revenue over the next four weeks.

Small and medium businesses (28% and 23% respectively) were more likely to report a decrease in expected revenue over the next four weeks compared to large businesses (12%).

Changes in operating expenses

Half of responding businesses (50%) reported operating expenses had increased over the past four weeks. This was higher for medium sized businesses (56%), compared to small (49%) and large businesses (44%).

Businesses in Agriculture, forestry and fishing (79%) were most likely to report operating expenses had increased over the past four weeks, followed by Manufacturing (65%), Retail trade (58%), and Accommodation and food services (57%).

Businesses reporting an increase in operating expenses, by industry(a)(b)
	Proportion of businesses (%)
Agriculture, forestry and fishing	79
Manufacturing	65
Retail trade	58
Accommodation and food services	57
Transport, postal and warehousing	56
Construction	52
Wholesale trade	51
Administrative and support services	51
Arts and recreation services	48
Mining	47
Other services	47
Information media and telecommunications	46
Professional, scientific and technical services	44
Electricity, gas, water and waste services	41
Education and training	40
Financial and insurance services	37
Rental, hiring and real estate services	33
Health care and social assistance	32

Businesses reporting an increase in operating expenses, by industry(a)(b)

["","Proportion of businesses"]

[["Agriculture, forestry and fishing","Manufacturing","Retail trade","Accommodation and food services","Transport, postal and warehousing","Construction","Wholesale trade","Administrative and support services","Arts and recreation services","Mining","Other services","Information media and telecommunications","Professional, scientific and technical services","Electricity, gas, water and waste services","Education and training","Financial and insurance services","Rental, hiring and real estate services","Health care and social assistance"],[[79],[65],[58],[57],[56],[52],[51],[51],[48],[47],[47],[46],[44],[41],[40],[37],[33],[32]]]

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(a) Proportion of responding businesses.
(b) Over the past four weeks.

Reason for operating expenses increasing

For the May 2026 cycle, businesses were asked to provide information on the factors or reasons why operating expenses had increased. A short list of options (including an ‘Other’ text field) was provided, and businesses could select multiple reasons.

More than four in five (82%) businesses indicated fuel prices as a reason for an increase in operating expenses over the past four weeks, followed by freight or delivery costs (58%), business overheads (52%), and input costs of other goods or materials used by the business (49%).

Businesses reporting fuel or freight and delivery costs as a reason for increased operating expenses, by industry(a)
	Fuel prices (%)	Freight or delivery costs (%)
Agriculture, forestry and fishing	94	85
Mining	78	17
Manufacturing	94	78
Electricity, gas, water and waste services	97	66
Construction	86	56
Wholesale trade	85	72
Retail trade	86	73
Accommodation and food services	86	84
Transport, postal and warehousing	95	37
Information media and telecommunications	74	39
Financial and insurance services	47	15
Rental, hiring and real estate services	69	44
Professional, scientific and technical services	70	53
Administrative and support services	80	43
Education and training	76	44
Health care and social assistance	86	42
Arts and recreation services	64	55
Other services	78	48

Businesses reporting fuel or freight and delivery costs as a reason for increased operating expenses, by industry(a)

["","Fuel prices","Freight or delivery costs"]

[["Agriculture, forestry and fishing","Mining","Manufacturing","Electricity, gas, water and waste services","Construction","Wholesale trade","Retail trade","Accommodation and food services","Transport, postal and warehousing","Information media and telecommunications","Financial and insurance services","Rental, hiring and real estate services","Professional, scientific and technical services","Administrative and support services","Education and training","Health care and social assistance","Arts and recreation services","Other services"],[[94],[78],[94],[97],[86],[85],[86],[86],[95],[74],[47],[69],[70],[80],[76],[86],[64],[78]],[[85],[17],[78],[66],[56],[72],[73],[84],[37],[39],[15],[44],[53],[43],[44],[42],[55],[48]]]

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(a) Proportion of responding businesses that indicated operating expenses had increased over the past four weeks.

Expectation of operating expenses over the next four weeks

Over one third (36%) of businesses expect operating expenses to increase over the next four weeks. This was highest in Manufacturing (52%), Agriculture, forestry and fishing (51%), Retail trade and Accommodation and food services (both 50%).

Business sentiment on ability to meet financial commitments

Businesses were asked to provide an indication on how difficult or easy it would be for the business to meet its financial commitments over the next four weeks. The responses provide a point in time indication of business sentiment based on the conditions experienced at the time that the business completed the survey.

In May 2026, one third (33%) of businesses expected it to be very difficult or difficult to meet their financial commitments over the next four weeks.

Transport, postal and warehousing (56%), Accommodation and food services (49%), and Agriculture, forestry and fishing (44%) had the highest proportion of businesses that expected it to be very difficult or difficult to meet their financial commitments over the next four weeks.

Small and medium businesses were more likely to have difficulties meeting financial commitments in the next four weeks (33% and 27% respectively) compared to large businesses (11%).

Anticipated ability to meet financial commitments over the next four weeks(a)(b)(%)
	Small businesses	Medium businesses	Large businesses	All businesses
Very difficult	9	7	3	9
Difficult	24	20	8	24
Neither difficult nor easy	38	46	46	38
Easy	13	14	22	13
Very easy	5	6	9	5
Not applicable	7	3	7	6
Don't know	5	3	3	5

(a) Proportion of responding businesses.
(b) Examples of financial commitments include fixed operating costs, debt obligations, payroll costs, and supplier credit for materials or stock etc.

Acknowledgement

The ABS would like to thank all businesses for their involvement in the survey.

Data downloads