New figures show the business community is struggling and remains reluctant to hire staff following the May federal budget.
The Australian Chamber of Commerce and Industry’s most recent Business Expectations survey found that key indicators — namely those measuring sales, profits, investment and employment — were grounded in negative territory.
The general business conditions index was well below the neutral level despite rising from a reading of 46.6 to 46.9 in the June quarter. The expected economic performance index – measuring business expectations over the next 12 months – also fell from a reading of 52.6 to 50.7 reflecting a decline in confidence following the May budget.
ACCI chief executive Kate Carnell said the survey showed trading conditions remained poor and that depressed profitability and poor selling prices continued to undermine employment and investment.
“The current survey readings indicate that the labour market will remain soft for some time and that the forecast transition from mining investment-led growth to broader-based economic activity remains elusive,” she said.
“It is clear the mainstream economy is struggling to fire on all cylinders. There is still no convincing evidence of a recovery in investment beyond the mining sector and retail trade has softened in recent months following a sharp dip in confidence after the release of the budget.”
The current employment index fell slightly, while the index measuring investment in plant and equipment showed a spark of improvement while remaining mired in the longest contractionary period in the history of the survey.
The sales revenue index increased somewhat over the June quarter, its third consecutive increase. Similarly, the profits index showed a small improvement in the June quarter, although the index has remained stuck in negative territory for about the last seven years.
On a positive note, the current export sales index performed well and rose sharply into positive territory from 48.8 to 51.5.