Business conditions in March fell to their lowest level in 4 years after falls in the manufacturing and retail sectors. This is a finding of the Monthly Business Survey by NAB.
However, the report says that this bad result has not been accompanied by a drop in confidence and that lower interest rates need more time to work through the economy.
According to the NAB, "Heavy falls in manufacturing and retail business conditions indicate we are yet to see the upswing in consumer demand that policy makers are searching for."
"Instead, it seems that either lower interest rates need more time, or more stimulus, for example RBA rate cuts, may be needed to set the economy back on a steady growth plan."
The report noted that the business confidence had not been affected by the crisis in Cyprus and that labour costs growth remained unchanged and was at a below average rate.
This reflected the subdued employment conditions.