-- Business confidence in Australia "plunged" in March due to the Persian Gulf conflict, echoing the gloom of the 2008-9 Global Financial Crisis, and COVID-19 era, NAB Economics reported on Tuesday.
"The outbreak of the conflict in the Middle East saw business confidence fall...to negative 29 index points, the second-largest monthly fall in the survey's history," said NAB Economics. "Falls of this magnitude have previously only been seen in the GFC and the onset of COVID."
Before March, business confidence index had been flat, at zero.
In better news, while Australian confidence declined in March, perceived business conditions were roughly constant according to survey respondents, reported NAB Economics, a part of NAB, the large bank.
"Meanwhile, business conditions fell only 1 point to 6 index points in March, reflecting the fact that while the global news backdrop has impacted sentiment, it is still early in terms of the flow through to activity," said NAB Economics.
However, the category of forward orders fell sharply in March, "erasing gains seen earlier in the year and pointing to rising caution among firms," added NAB Economics.
Australian enterprise also reported rising costs of operation. The cost of goods to operate in March rose at a 3% quarterly rate, while labor costs rose at a 1.5% rate, said NAB.
In March Australian businesses also reported easing sales and slipping profitability, according to survey results.
The NAB Monthly Business Survey contacts about 600 small, medium, and large non-agricultural companies to assess business confidence and conditions, by telephone, each month.