Business confidence back in decline

After a bounce following the government’s first stimulus package announced late last year Australian business confidence has hit a new low.

National Australia Bank’s monthly business survey and economic outlook for January, released yesterday, saw a 12 point fall in business confidence to a new record low of -32 points.

Business conditions also slumped, falling 5 points to -11 index points, on par with levels recorded in October 2008.

While the results of the survey deteriorated from December NAB maintained its forecast for only a moderate recession in 2009.

It expects GDP to shrink by 0.25 per cent in 2009 and has forecast the cash rate to reach 2 per cent by mid-year, with a further 75 points to come off the cash rate as early as next month.