According to the National Australia Bank LTD, which did a survey of some 400 companies here, the Australian business confidence level has dropped significantly. Its drop, which marks a two year low as noted through December of 2007, is significant in what it likely brings.
Most believe that this will be a sign to companies to bring down investment levels and to slow hiring. In addition, this likely means further slowing of the economy here.
There are several likely additives to the economic downturn and the drop in confidence. First, the US and Asian market downturns will cause a significant problem for Australia's economy. In addition, growth is slowing throughout Europe as well as in Japan, which are major export locations for Australia. Insecurity in financial markets is another problem that is likely to hurt the economy here.
Fears that Japan may have dropped into an economic recession are very hard hitting in Australia, as this is the largest export country for Australia. Japan's economy, which is said to be second only behind the US, saw a drop in consumer demand and appreciating currency. The housing market here too has been hurt.
All of this leaves the Australian economy in a downswing that many believe will lead to further problems here.