Small business trading conditions and confidence have continued to deteriorate against the backdrop of an escalating European debt crisis, and weak consumer confidence and spending, a new survey shows.
The Australian Chamber of Commerce and Industry's small business survey showed its conditions index fell to 41.0 in the September quarter, from 42.1 in the previous three months, to its lowest level since March 2009.
The index remains below the 50 mark that separates expansion from contraction and is 6.1 points below its five year average.
The survey released on Tuesday also showed the expectations index for the current December quarter falling below the 50 point level for the first time in two years.
ACCI director of economics and industry policy Greg Evans said while small business continued to face subdued selling prices and sales revenue, increasing wage costs and other operating costs have continued to put significant pressure on small business profitability.
The survey's profit index was just 37.7 points in the September quarter.
Mr Evans said the Reserve Bank of Australia's official cash interest rate cut earlier this month had provided much a needed breathing space to small business and consumers.
"However, the lack of immediate action by most banks to pass on the 25 basis points cut to their small business customers is disappointing," he said in a statement.
"Moreover, the recent passage of carbon tax legislation will further dampen small business and consumer sentiment in the face of increasing global uncertainty."
