The index was down in the June quarter 2019 by 15 points and fell below the positive/negative 100 level for the first time in two years.
Additionally, expectations of the economy for the year ahead fell 16 points to 80 and economic performance compared to a year ago fell 35 points to 81.
According to Warren Hogan, chief economic adviser at The Executive Connection and industry professor at UTS Business School, these findings correctly reflected the sentiment of the business community.
“While the cause of some uncertainty can be attributed to the upcoming Federal Election and a possible change in government, CEOs and business owners are also likely to be concerned about falling property prices, soft consumer spending and the state of the global economy,” he said.
Despite this, business leaders remained quite optimistic about their own business prospects as most measures of own business activity stabilised in the first quarter of 2019 and all measures remained at net-positive levels.
Commenting on the lead up to the federal election, the majority concern was attributed to the Labor party proposals to negative gearing and capital gains tax reforms and policies impacting industrial relations including adjustments to minimum wages.
“Our analysis indicates that businesses are mostly concerned about the impact of new policies on economic activity, rather than the direct implications for their own business operations.
“This will add to the typical pre-election uncertainty across the economy and may dampen economic activity over the next six weeks,” Hogan concluded.
