Corporate confidence in the future of the economy has again fallen, according to the latest Business Confidence Survey from the National Australia Bank.
The news will please the Reserve Bank and other commentators whose confidence was shaken by the March quarter Consumer Price Index figures and the story they told of stronger than expected price pressures throughout the economy.
The NAB said this morning that overall business confidence has fallen markedly for the June quarter 2008 to record one of the biggest annual falls in the past decade.
The bank’s head of Australian Economics, Jeff Oughton said in a statement: “NAB’s Business Confidence Index is down a further 10 points to -4 points for the June quarter, compared to 10 points in mid 2007 and similar to the lows reached in 2000/01 during the global tech wreck and the previous US and global slowdown. The negative impact of the global financial turmoil and tighter financial conditions continue to weigh on the outlook.”
The news comes at the start of a vital week for the economy both here and in the US.
The US Federal Reserve has a two day meeting which could see rates cut early on Thursday morning, plus we’ll see the release of the first of three readings on US first quarter economic growth, US job and unemployment numbers and the latest survey of US house prices with the Standard & Poor’s Case/Schiller index for February (it’s already showing a 10% fall in 2007 and will show a large fall this week).
In Australia, we have building approvals for March out on Thursday and retail sales for the same month on Friday. Both are expected to show sharp falls in activity.
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