Business confidence has improved for the second month in a row albeit at depressed levels, NAB’s Monthly Business Survey and Economic Outlook has revealed
Business conditions are also marginally higher but still trending down in all areas, with employment a key area of weakness. According to the bank, the confidence reading is now more in line with outcomes and less driven by fear.
However the overall Survey still points to falling demand in Q1, highlighting further negative growth.
The bank’s global GDP forecast remains unchanged at -1 per cent. The Australian GDP forecast for 2009 also remains unchanged at -1 per cent and +0.9 per cent in 2010.
“These forecasts reflect the current poor starting point, together with weaker exports and business investment given the global outlook.
“[Rate] cuts going forward will be data dependent and likely to be delivered in 25 point moves. Overall we still see the forecasts requiring a cash rate down to around 2 per cent by late 2009,” the bank said.