Australian business conditions drop sharply

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SYDNEY, Oct 28 (AFP): Australian business conditions fell sharply in the third quarter on lower sales and profits, a National Australia Bank (NAB) survey released today showed.
The NAB said while business confidence rose one point to -7 points for the September quarter, conditions plummeted 11 points to -4 points.
"Firms identify a lack of customer confidence/demand as the key driver of the sales slowdown," NAB chief economist Alan Oster said.
Australia's central bank cut interest rates by 25 basis points in September and followed this with a full percentage point cut in October, leaving the official cash rate at 6.00 per cent.
Oster said businesses have begun to significantly lower their expectations for the coming three to 12 months while evidence was beginning to emerge of a softening in the labour market.
The NAB said local economic growth was expected to slow to 1.25 per cent in 2009 as a result of weaker commodity prices and falling global growth.