Supply chain issues are falling down the list of concerns for Australian businesses although expensive labour is still driving up costs.

Pandemic-driven supply chain issues are easing but around a quarter of Australian businesses are still struggling to access supplies when they need them, a NAB survey shows.

The survey of 760 business owners revealed improving supply chain conditions, but high labour costs remained a concern.

NAB executive for business metro Michael Saadie said the tight jobs market was driving up labour costs and inflating prices along the supply chain.

Sky high energy prices were also a concern, as well as China’s restrictive management of COVID-19.

Crucially, the survey showed supply chain issues holding up construction products are starting to ease.

But flooding was making fresh produce hard to come by, the survey showed, with microchips also still in short supply.

Mr Saadie said investing in Australian-based manufacturing could improve the resilience of businesses reliant on overseas suppliers.

“Although global supply chains are improving, greater investment in local manufacturing facilities opens up a lot of opportunities – it means reducing reliance on overseas suppliers while also stimulating the local economy through valuable jobs,” he said.

More than half of Australian business owners are eying off Australian-based suppliers to protect their companies from supply chain pressures.

Mr Saadie said small businesses had adapted to the supply-constrained environment by ditching “just in time” stock management to a “just in case” strategy that involves stockpiling for times of shortages.

– with AAP