Australian businesses are forecasting a lacklustre new year, with lowered expectations for sales, profits, employment growth and investment.
The muted outlook comes despite an improvement in actual indices for profit investment and selling prices in the three months to September 30 compared to the previous three months.
Dun and Bradstreet's Business Expectations Index, out on Tuesday, has fallen to 18.7 points, down 3.1 points from the final three months of 2015.
And the figure is much lower than the 23.9 points result for the first three months of 2015.
But that was the highest business expectations index result in 12 years.
Sales expectations continued to track lower across all industries, except transport, communication and utilities.
Dun and Bradstreet's head of group development, Adam Siddique, says business confidence remains historically strong, although a cooling housing market may present challenges in the year ahead.
"There can be no doubt that the Sydney and Melbourne housing markets are now slowing down, witch is to be expected after a period of spectacular growth," he said.
Dun and Bradstreet said September's federal leadership spill continues to have an "underwhelming effect" on business sentiment.
More than half (55.6 per cent) of those surveyed expected a new prime minister and treasurer to have no impact on their business.
Dun and Bradstreet obtains its results from monthly surveys of several hundred business executives across all major sectors.
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