Business expectations have become gloomier. Again.
The Dun & Bradstreet Business Expectations Index, based on surveys during May and looking ahead to the September quarter, has fallen for the third quarter in a row.
The index is now at its lowest level since the survey undertaken in August 2013, just ahead of the last federal election.
The index is an average of expectations for sales, profits, employment and capital investment.
But the index for actual conditions, based on the same indicators but looking back to the March quarter, also fell in the latest survey, hitting its lowest point since the reading for the June quarter of 2013.
Stephen Koukoulas, economic advisor to Dun & Bradstreet, said the economic outlook is deteriorating rapidly.
"The relatively good news for the economy seen in late 2015 has turned sharply lower in the middle of 2016, with the focus on the election campaign dominating the news and this is eating away at the business sector."
The survey showed the outlook for the retail sector is especially bleak, with an expectations index dropping to a near-three-year low after sliding steeply in the previous two quarters.
Over one third of all businesses surveyed expect consumer confidence to have the biggest impact on their operations in the quarter ahead, suggesting the impending July federal election could be weighing on optimism.
But the economy already seems to have run into trouble.
"The 'actual' performance of the economy has also weakened, which points to a slowing rate of economic growth in the first part of 2016," Mr Koukoulas said.
The measure of employment expectations showed some hints of improvement, as the outlook brightened in the manufacturing and transport, communication and utilities sectors.
But the overall index of employment expectations was still at its lowest point since 2013 while the outlook for profits was the bleakest since 2012.
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