We all know actions speak louder than words. They should also speak louder than survey answers. There seems to be a major disconnect between the level of confidence among Australia’s business leaders and their chief financial officers and the demand for business credit. One would think they should generally move in tandem, with a slight lag.

Almost every survey I have seen over the past year of Australian business conditions reveals upbeat and record levels of confidence. National Australia Bank’s (ASX: NAB) Group chief economist Alan Oster reported in the June Monthly Business Survey, “the business conditions index remains well above average, suggesting conditions are strong in the business sector. Conditions remain favourable across most states and industries. Higher profitability and trading conditions as well as high rates of capacity utilisation also remain conducive to higher business investment.”

Deloitte’s recent sentiment report of Australia’s chief financial officers (CFO) revealed a sense of euphoria within their ranks. Over 75% of those surveyed were either optimistic or highly optimistic about the prospects of their companies. Optimism had increased since the previous survey, reflecting a continuation of a strong level of confidence. Risk appetite was also on the rise, with 64% saying they were more comfortable taking on more balance sheet risk, supported by stronger business conditions. While optimistic, CFOs were wary of trade tensions between the US and China, with over 50% saying escalation would have a short-term impact, with the number surging to 70% for the medium term.

Questions must be asked; the answers are perhaps hard to find. Given the favourable survey outcomes, why has the annual growth rate for business credit slowed to just 3.2% in the year ended 30 June, from an eight-year high of 7.3% in the year to April 2016? Are banks being side-stepped as more and more corporates tap the domestic and international bond markets for longer maturity loans at competitive rates?

How much faith can be put in these surveys or is it yet another example of the business sector talking big and doing little? Are they waiting for tax cuts to kick in in 2026? But, when has business ever been the leader? Promises, promises.

Consumers are acting, not talking. June’s retail sales grew 0.4% month-on-month and 2.9% year-on-year, both above consensus estimates. It was the sixth consecutive month of growth in retail trade. Household piggy banks continue to be raided, with the savings ratio in the March quarter near a 15-year low at 2.1% and likely lower in the June quarter. Households are becoming increasingly leveraged, particularly as the housing price decline erodes the asset side of the balance sheet.

Looking forward, it is likely the persistence of weak wages growth combined with an evaporating household wealth effect, will keep a lid on consumption. GDP growth will increasingly rely on government infrastructure investment and volatile net exports. As with government debt and cholesterol, there are “good and bad” components. Similarly, with GDP, household consumption is “good” and is stressed. The Reserve Bank is only too aware of its condition and after celebrating two years of unchanged official rates in August, it is likely this time next year there will be a third anniversary.