The bad economic news continued on Tuesday when Roy Morgan reported a 8.6 per cent drop in business confidence.
With a drop of 9.7 points to 102.6, business confidence is now the lowest it’s been since August 2011. If it falls another three points, it will be at its lowest level since the GFC.
It’s also significantly lower than consumer confidence, with the ANZ-Roy Morgan Australian Consumer Confidence average at 113.0.
Roy Morgan predicted both will business and consumer confidence will fall in September.
“It is not surprising that business confidence declined in August, given the ongoing volatility of global financial markets during the month,” said Norman Morris, industry communications director at Roy Morgan Research.
“Of major impact locally was the 8.6% drop in the ASX, the result of increased global economic and political uncertainty, particularly the dramatic movement in the Chinese stock market.
“Continued low commodity prices and their negative outlook, poor GDP growth, and the plummeting Australian dollar are all contributing to uncertainty in the market and impacting business confidence.”
He said the ailing resource sector is unlikely to be offset by industries such as manufacturing, agriculture and retail.
He said confidence in the “all-important” construction industry remains only around average, “and is not showing any real signs of improving”.
He said the industries that are looking good are financial services and property related businesses.