Despite healthy business conditions, business confidence levels dipped seven points to 5, falling below its long-term average for the first time since mid-2016.
On the other hand, business conditions are at their highest level since the global financial crisis.
NAB chief economist Alan Oster says the slippage was a concern but it might prove to be temporary.
“For those indicating deterioration in confidence, the biggest concerns appear to be customer demand, government policy, as well as cost pressures — both energy and wages,” he said.
Most industries are performing but retail is the laggard, with conditions in that sector in negative territory.
“We will be watching this trend closely as household consumption is a notable point of difference between our relatively subdued growth outlook and the RBA’s more sanguine forecasts, and
will be key to the economy’s sustained return to trend growth,” Mr Oster said.
On the plus side, overall business conditions moved one point higher to 15.
Business conditions are now well above their long-term average, sitting at their highest level since early 2008, before the global financial crisis.
In another survey, the Westpac-Melbourne Institute SME Index, also released yesterday, found business confidence rising by 3.2 per cent in the third quarter, shifting above the 100 neutral mark for the first time this year.
This despite SMEs reporting weak conditions, dropping 3.2 per cent since the last quarter. “It’s pleasing to see uplift in business confidence, regardless of difficult current conditions,”
Westpac senior economist, Matthew Hassan said.
“Australian businesses appear to still be optimistic and planning for the year ahead. SME owners expect to see the number of staff in their business grow within the next 12 months, and the Index found a large number of SMEs are continuing to increase their levels of investment.”