Business conditions 'worst in three years'

A new study conducted by National Australia Bank (NAB) has confirmed that trading conditions have fallen to a three-year low across the country.

Firms have found it difficult to remain profitable since the recession took effect and confidence levels are on the wane.

The NAB index showed that business conditions fell by six points to minus two in May, while corporate sentiment also dropped by four points to minus four.

Most of the downturn has been attributed to the ongoing financial turmoil in Europe, as organisations down under are fearful of a full-scale economic collapse.

Surprisingly, official figures released by the Australian Bureau of Statistics indicated that uptake of business loans has increased in recent months.

Chief economist at the NAB Alan Oster said: "The latest bout of volatility on global financial markets is starting to impact on business planning with some of the latest surveys pointing to a softening in the outlook for Europe."

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