Confidence among Australian businesses declined further in the June quarter, as a cumulative 125 basis-point interest rate reduction by the Reserve Bank of Australia in the past few months failed to offset growing concerns about Europe.
In a quarterly business survey, the National Australia Bank (NAB) said that it business confidence index slipped to -2 in the June quarter from -1 in the March quarter.
"The cumulative 125 bps of cuts by the RBA since late last year does not appear to have fully offset heightened concerns about Europe," the report said. More businesses appear to be worried about the implications of the minerals resource rents tax and carbon tax, which came into effect on July 1.
The current business conditions deteriorated further with the relevant index falling to -1 in the second quarter from 3 in the previous quarter. Expectations about the business conditions in the next 12 months also worsened with the index dropping to 16 from 19.
Conditions deteriorated across most industries, and were particularly weak in manufacturing and construction.
Meanwhile, business investment plans in the next 12 months rose slightly, reflecting a pick up in non-mining capex intentions.
by RTT Staff Writer
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