Australian business confidence dropped in February, according to a new National Australia Bank business confidence survey.
The survey found business confidence retreated from +4.0 to +0.9, while conditions lifted slightly from +2.3 to +3.0.
“While the fall was marginal and may just reflect month to month volatility, it is more likely that it reflects some degree of increased concern about the international economic environment and its potential impact on local business activity,” the NAB says.
Forward indicators remained weak as retail, manufacturing and construction continued to struggle.
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“Business conditions improved a little in February, supported by a solid pickup in trading conditions and a slight rise in profitability, partly offset by a softening in employment conditions.”
Services, transport and mining remain strong while growth trends lowered.
“Uncertainty emanating from Europe, the persistent strength of the Australian dollar and the decision by the RBA to keep rates on hold in February all weighed on confidence in some sectors,” the report states.
“It was the 11th-straight month that forward orders have failed to lift into positive figures,” Craig James, chief economist at CommSec, observed.
“The petrol price continues to creep higher, placing pressure on household budget and entrenching the mood of consumer conservatism. There are few positives for the retail sector at present.”