Nearly eight in 10 Australian business leaders were found to be pessimistic about the coming year, according to the annual Perpetual Leadership Survey results.

According to the survey, 78 per cent expect that next year will be more difficult for business than last year, with only 10 per cent believing conditions will improve. This is in stark contrast from last year, when only 12 per cent were pessimistic about prospects for their business.

China’s economy was seen as having the most positive impact on future business with 40 per cent of respondents. Other positives included the demand for resources (30 per cent) and the Aussie dollar (20 per cent).

The report noted that despite the downturn, the war for talent and labour shortages remained the key challenge, with almost 80 per cent of respondents perceiving it as a negative impact on business. Other perceived negative impacts included inflation (70 per cent), cost of credit (60 per cent), interest rates (60 per cent), and the US economy (55 per cent).