Australia's NAB Aug business confidence slips to 6 pts from 10 in July

National Australia Bank (NAB) said its business confidence index, which measures expectations for the following quarter, eased to a seasonally adjusted 6.0 points in August from 10.0 points in July.
NAB said the overall business conditions index, a composite of trading conditions, profitability and employment across the non-farm business sector, fell to 10.0 points in August seasonally adjusted from 12 points in July.
It said forward orders also weaken markedly, dropping 6.0 points to zero.
NAB said the main message from the latest survey is that both business confidence and near term expectations for business conditions have been significantly lowered since the Reserve Bank of Australia raised cash rates.
"Current business conditions are moderating, albeit less dramatically, from still reasonable levels
- but the fundamental downward trend is increasingly clear," NAB said.
It said the survey results should provide some comfort to the RBA that the domestic economy has continued to slow into the September quarter with the prospect of more to come in late 2006.
"While inflation will remain high in the near term, this slowdown in domestic activity should provide
the RBA with more comfort on the medium term inflationary outlook," NAB said.
It said the survey result is consistent with NAB's revised economic forecasts and its view that cash rates will not be raised again in 2006.
The RBA raised its official cash rate 25 basis points to 6.0 pct in August following a rise of the same magnitude to 5.75 pct in May.