Businesses are pessimistic about trading conditions and their performance for the first quarter of 2012, as concerns about the European debt crisis and the slowing Chinese economy pulled down the majority of indicators in the Australian Chamber of Commerce and Industry’s (ACCI) Survey of Investor Confidence.
Apart from the ‘Expected Unemployment Rate’, all indicators in the ACCI survey fell below five-year averages in the three months to December 31 2011.
The current indexes of ‘Own Business Conditions’ and ‘Sales and Profitability’ remain at the historic low levels seen during the December quarter, while the reading of expectations shows businesses are pessimistic about their own trading conditions and business performance over the first quarter of 2012.
The index measuring businesses’ views hit just 48.2 points, falling short of the 50-point level separating growth from contraction.
Mainstream businesses, including the manufacturing sector, are being affected by the strong Australian dollar and weaker demand, ACCI director of economics and industry policy Greg Evans said.
“It is alarming that business hiring intentions for the first half of 2012 has fallen to its lowest level in the Survey’s 14-year history,” Evans said.
“In these circumstances reducing cost pressures is becoming more critical with this survey showing business taxes and government charges are the number one constraint on investment.”
To counter this sliding confidence, Evans said lowering tax burdens and eliminating the carbon tax must be considered.