Sydney - Tuesday - August 5: (RWE Aust Business News) - The June quarter Commonwealth Bank ACCI Business Expectations Survey shows a significant fall in business confidence and reported business conditions. Business confidence fell to its lowest level since the survey began in 1994 and general business conditions were at the lowest level for five years. Among the surveys indicators, only export sales were sound and continued to grow over the quarter despite a stronger Australian dollar. Growth indicators such as sales, profits, employment and investment all moved down over the quarter. On a positive note, cost pressures eased moderately for business with wage and non-wage labour costs growing at a slower pace. Moreover, the price data continued to moderate. Mr Greg Evans, Director of Industry Policy and Economics, Australian Chamber of Commerce and Industry, commented: The next two quarters remain challenging for Australian businesses. With regard to the inflation outlook, ACCI considers moderation in wage and non-wage growth as well as declining business confidence and profit growth reduce the possibility of a wage-price inflationary spiral, despite the headline inflation hitting a 13-year high of 4.5 percent in the year to June. Given the notable slowing in growth ACCI considers that an interest rate cut should be considered as early as possible. Mr Robert De Luca, Executive General Manager, Corporate Financial Services Commonwealth Bank, commented: The results recorded over the past quarter show the global liquidity crisis is clearly impacting Australian business. However, it is encouraging to see some buoyancy from those businesses operating outside of the domestic market. Exporters continue to take advantage of high commodity prices and export sales maintain steady growth, underlining the significance of their contribution to the overall economy. With tight operating conditions expected to continue over the coming months, it is critical for businesses to maximise efficiencies and streamline business practices to see them through these challenging times. The survey assessed business conditions and business confidence amongst 2,121 businesses around the country over the April, May and June period.
