“This has reinforced our expectations of a growth slowdown and limited inflation over the coming year,” says Satish Ranchhod, senior economist at Westpac.
“Businesses have become increasingly pessimistic about the outlook, with confidence falling to a six year low.
“Confidence is particularly weak in the agricultural sector, but is at low levels across the economy.
“This reduced confidence is passing through to weaker hiring and investment intentions.
“There remains downward pressure on prices.”
For the fifth month in a row business confidence has fallen sharply. This has taken confidence to lowest level since 2009, a time when the global economy was in the grip of the financial crisis.
“And it’s not just confidence in the general economic situation that’s fallen. Businesses have also noted that expectations for activity in their own firms have fallen again, also down to a multiyear low. This tends to be a leading indicator for GDP growth, and reinforces our expectations for a significant weakening in GDP growth over the coming year,” adds Ranchod.
“This survey also highlighted the continued downward pressure on prices. In addition to inflation expectations remaining low, the number of businesses planning on increasing prices has been pulling back in recent months.”