Despite Steady Economy, Business Confidence Remains Low

Based on a private survey published by the National Australia Bank (NAB), business confidence is still slightly down, despite strong conditions in the mining industry and some improvements in the country’s economic standing.

According to the survey, the recent interest rate cuts account for why this is low. The index shows that business confidence actually dropped to as much as negative three points this month.

In addition to this, employment conditions all across industries were slightly down in June, and consumers have to resort to frugal spending and belt-tightening because credit rates have changed. Analysts from the NAB also take into account the economic problems in Europe, as well as the implementation of the carbon tax law beginning July 1^st.  This has, in fact, overshadowed any issues with regards interest rate cuts.

In a statement from NAB, the company said that its most recent rate cut of 25bp last June seems to have provided only a little added support to confidence levels. It appears that businesses are focusing more on the possible implications of MRRT and the carbon tax.