Business confidence plummets in May, survey shows

Business confidence across Australia has fallen to its lowest ebb since August 2011, new figures have found.

Trading conditions are still very challenging down under and it appears that companies are worried about their future prospects.

Roy Morgan Research's latest corporate confidence index dropped by 6.4 points in May – down from 112.2 in April.

Organisations are concerned about the global economy and do not hold out much hope of an upturn in the next 12 months.

Industry communications director at Roy Morgan Research Norman Morris said that firms are reluctant to take out business loans in order to expand, even though interest rates have been cut across the country.

He added that just 48 per cent of enterprises feel that the next year will be a good time to invest, which is the lowest figure since December 2010.

"Victoria was hit the hardest but remained around average, while Western Australia is still the most optimistic state and Tasmania and South Australia continue to lag," Mr Morris remarked.

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