Australia | Jul 28 2008
By Chris Shaw
Australian business confidence levels have fallen to pessimistic levels as economic conditions continue to bite, the latest National Australia Bank survey showing only the mining and health sectors are actually positive about the outlook for the near-term.
In contrast the survey shows negative expectations in the homebuilder, household goods, car retailer, real estate and transport sectors, with the bank’s head of Australian economics Jeff Oughton suggesting the findings reflect the current triple whammy of lower activity and consumer confidence levels, higher costs and volatile equity markets.
As Oughton notes the bank’s Business Confidence Expectations Index has fallen four points to a reading of minus 8 for the September quarter, which while down remains above the lows seen in the early 1990s. It shows 30% of Australian businesses expects a further mild deterioration in conditions in the current quarter compared to 40% expecting little change and only 20% forecasting conditions will improve modestly.
Oughton also points out the survey shows business confidence levels are fairly consistent between both small and large corporations, while only mining companies have a higher level of confidence now than when the Index peaked in the middle of last year.