Australian business confidence collapses to lowest level on record

National Australia Bank’s latest business survey has revealed that business confidence has plunged to its lowest ever level as the economy continues to be battered by the effects of coronavirus.

Business confidence fell deep into negative territory to -66 points in March, following the introduction social distancing measures and widespread economic shutdown to quell the spread of the pandemic in Australia.

The statistics in the survey indicate that more than AUS$200 billion in Federal Government economic rescue spending and emergency actions by the Reserve Bank of Australia have done little to prevent a huge dent in business confidence.

NAB chief economist Alan Oster said he was worried that the business outlook was the weakest ever recorded since the survey began in 1989 – worse than recession of the early 1990s and the 2008 global financial crisis.

“Business has essentially told us that trading conditions, profitability and employment all went backwards in a big way in the month,” he said.

“While almost everyone expects a fairly rapid rebound once the spread of the coronavirus is contained and social distancing rules are relaxed, the immediate worry for the business sector is the impact on cashflows.”

Oyster added that the bank expects to see a recession of ‘unprecedented speed and magnitude’ for the Australian economy over the next three quarters and a sharp increase in unemployment.