The NAB ASX 300 Business Survey found confidence in the ASX 300 declined from +11 points in the March quarter to a final reading of +3 points.
The dip in business conditions for larger firms was the result of a marginal softening in sales and a significant deterioration in employment, according to NAB.
NAB said the proposed tax and public expenditure changes in the May federal Budget have “raised concerns adding onto the constraints on profitability, in an environment where sales margins continued to narrow”.
The bank said the dip in the ASX300 was, however, broadly in line with economic conditions.
While trading conditions and profitability remained at strong levels, the results showed employment in large firms dropped from 6 points to -4 index points.
“Weak labour market outcomes are expected to continue, with little improvement in business conditions expected over the coming year,” said NAB.
The results also indicated a decline in capex as investment dipped into negative territory for larger firms.
“However, firms overall plan to invest more in the coming 12 months,” said NAB.
