Q+A: The Week Ahead | 13 July 2026
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What economic surveys and guests will be covered this week?
Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics, and more. I'm Michael Thompson, and every Monday morning, we are joined by economist Stephen Koukoulis to look at the week ahead. You'll find him at thekouk.com, T-H-E-K-O-U-K.com, and sharing his views on LinkedIn as well. Stephen, good morning. And a very good morning to you, Michael. So this week, we've got NAB Business Confidence, we've got Westpac Consumer Sentiment as well. But, I mean, the bigger backdrop is reasonably gloomy at the moment. Last week, we had Deloitte's warning of the weakest sustained growth since the early 90s recession. We had the IMF trimming global forecasts, ongoing tensions in the Middle East.
We'll start with NAB. Let's get going with NAB. The business survey, what do you expect it to show?
Yeah, look, the survey was conducted before this last bout of oil price shocks occurred late last week or the middle to latter part of last week. So I suspect it's going to be showing that some of that gloom that's in business conditions, business confidence, and these sorts of things might moderate a bit. Now, they were very gloomy in terms of business confidence over the last couple of months. That could improve slightly. But arguably more important within the NAB survey are questions to do with inflation indicators like their input costs, Their output costs and labor costs, you know, the bedrock of future inflation pressures. So to the extent that they sort of take and embrace some of this trend lowering in the oil price, I'll say, of course, notwithstanding the most recent spike higher.
We could be seeing a little bit of good news that some of those inflation indicators are moderating, but there's a lot of information there. There's subsets on employment intentions and profitability. It depends a little bit where the business sector is seeing the good parts of the economy. and perhaps the less good parts. One good part should be CapEx, expected CapEx. We're seeing with data centres and other things as well, that might be one area in the aggregate business survey where we're seeing just a bit more optimism to offset a large part of the gloom.
I mentioned in the intro Deloitte and the report last week, and part of that, almost the summary of it, the argument was really that kind of years of underinvestment have left the supply side of the economy struggling to keep up with demand. Would that show up in the NAB survey through kind of costs and margins and labor constraints, those kinds of things?
What does Stephen Koukoulas expect from the NAB business survey?
Yeah. It sort of does. There's also a measure called capacity utilization, which is how fast firms are running their businesses. And of course, when they reach capacity constraints, because of inadequate investment and or poor productivity and or the lack of skilled labour, there are many reasons why they might run up to capacity constraints. It means that inflation pressure is still elevated. In fact, the RBA in their hiking in the first part of this year mentioned capacity constraints as one of the reasons they were looking at. as a guide to future inflation pressures. So look, it's probably one of those ones that confirms that the economy just does not have that what do we call it, that engine room for growth and that we are going to muddle through this next six months, perhaps longer, where economic growth is going to be one point something below trend.
It'll feel pretty glum unless you're in one of the niche sectors of the economy. But for the aggregate economy, in a way, it's what we need. The RBA has sort of been saying we need a period of softer growth to get that inflation out of the economy before we can be happy again that we've got inflation back on target.
Just quickly before we move away from NAB, if business confidence is weak but conditions are holding up, which one matters more? Is there a clear winner?
Really good question. It tends to be business conditions because that's what's actually happening. Because as I understand it, and I confess I've never filled in an ab survey, I don't think market economics is big enough to get onto the survey panel.
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