Oz business conditions hit three-year low

Last updated 17:29 13/11/2012

Relevant offers

World

Airbus tips demand for bigger planes as airlines squeeze in more passengers Back from Vanuatu but next stop, Nepal Trans-Pacific Partnership: President Obama shifts his pitch on huge trade deal HBO chief: the channel's new streaming service is a "millennial missile" Comcast to end US$45 billion bid for Time Warner Cable Google first-quarter revenue jumps 12 per cent, shares rise Forbes reveals world's richest property tycoons Australian property seen as hot destination for money laundering US Democrats divided on Trans-Pacific Partnership Fast food giant says China recovering from meat scare

Australia's business sector has weakened further in the last quarter of 2012, with a survey showing conditions slumping to their lowest point in more than three years.

The National Australia Bank (NAB) monthly business survey, released on Tuesday, showed that conditions in October fell to minus five on the index, from minus three in September and zero in August.

It's now at its lowest point since May 2009. Business confidence has also receded, falling to minus one October, compared to zero in September. It was minus three in August.

NAB said the business conditions weakness reflected below-trend growth in the domestic economy, and suggested lack of confidence was having an impact.

And it doesn't see a change in the near future.

"The subdued outcome largely reflected a significant weakening of conditions in wholesale, manufacturing and construction, which all reported worryingly weak activity levels in the month," it said.

"Consistent with the subdued level of business conditions in October, forward indicators of demand (especially forward orders) and employment remained well below average levels, pointing to little improvement in near-term activity."

Forward orders rose marginally, to minus five in October from minus seven the previous month. NAB said the drop in business confidence was mainly prompted by global concerns, including a belief that US Federal Reserve and European Central Bank (ECB) economic stimulus measures had not solved those economies' wider problems.

It added that the Reserve Bank's decision in October to cut the cash rate a quarter of a percentage point, to 3.25 per cent, may have highlighted underlying concerns about the domestic economy.

"The cause of these rate cuts, including soft labour market conditions, fiscal tightening, the high Australian dollar and falling commodity prices may be of concern, keeping underlying confidence fairly subdued," it said.

Ad Feedback

- AAP

Special offers

Featured Promotions

Sponsored Content