Business conditions slump to four-year low

Despite a lower Aussie dollar and falling interest rates, business conditions have slumped to a four-year low. Source: News Limited

Business conditions in June were at their weakest level since May 2009, down to -8 from -4 in May, thanks to softer trading conditions and profitability, according to the National Australia Bank monthly business survey.

The mining, retail and manufacturing sectors were the hardest hit, despite the lower local currency, while the finance, business and property sectors saw solid improvement.

NAB said conditions in consumer-dependent sectors, like recreation, remained poor because of consumer reluctance to spend on discretionary items.

"All of this weakness has come about despite relatively easy monetary policy settings and the recent depreciation of the Australian dollar, which should be helping to improve Australia's competitiveness," NAB said.

"The outlook for near-term activity remains worrisome, with forward orders, stocks, employment conditions and capacity utilisation all remaining well below historical average levels." Meanwhile, business confidence lifted slightly in June but remained below trend, as any optimism inspired by the falling Australian dollar was weighed down by concerns about global economic conditions and subdued conditions in the Australian economy, the survey said. AAP