Business conditions fell by three points to +4 index points, which is below average levels, due to declines in the profitability and trading sub-indexes.
The decline in business confidence was more modest but the series has now been below average for some time, NAB said, with forward orders falling to below-average levels in the month and capacity utilisation falling further.
“This may have important implications for both future investment and employment decisions of businesses,” NAB Group’s chief economist, Alan Oster said.
Across industries, retail remains the weakest by some margin, and the only sector to record negative conditions in trend terms, according to the NAB report.
“While the decline in conditions has been broad-based across industries, retail remains a standout,” Oster said.
“It has now reported negative conditions for five months and with the outlook for the consumer remaining weak, we see little improvement on the horizon.”
Within the retail sector, the weakest sub-industries are in car retailing and household goods.
While the eastern states continue to show the best conditions, they are less confident than WA and SA, NAB said.
NAB’s Monthly Business Survey includes a number of sub-indexes such as capital expenditure, cash flow, employment and borrowing conditions, which together indicate the overall level of business confidence and conditions across industries.