Business trading conditions have hit the weakest level in 14 years, prompting calls for 50 basis points worth of interest rate cuts before Christmas.
An Australian Chamber of Commerce and Industry (ACCI) investor confidence survey for the September quarter released today showed business conditions at 46.4 index points, down from 47.4 points in the previous quarter.
It's the lowest index level since the survey began in 1998, and remains below the 50-point level separating contraction from expansion.
"It is concerning that the declining trends in trading conditions, sales and profits have seen no sign of rebounding since early 2010," ACCI director of economics and industry policy Greg Evans said in a statement.
This had dampened forward expectations and investment plans, while hiring intentions for the next six months also declined to the lowest in 14 years.
"Further rate relief in the order of 0.50 per cent between now and Christmas is required to assist the mainstream economy," Mr Evans said.
Mr Evans said the survey clearly showed manufacturing and construction industries would continue to face "significant headwinds" over the rest of 2012 and into early 2013.
This includes weak consumer demand, a high dollar and increasing global economic turmoil.
The Reserve Bank of Australia (RBA) is holding its monthly board meeting on rates this afternoon, and most economists expect the central bank to leave the cash rate at 3.5 per cent for another month.
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