The nation’s biggest business group is predicting unemployment to top nine per cent by the end of next year.
With sales and profitability falling to 11-year lows, it all adds up to a bleak 2009, the Australian Chamber of Commerce and Industry said as it released its latest survey of investor confidence.
The report suggests the unemployment rate will continue rising, after jumping to a four-year high of 5.2 per cent in February.
Projections for business conditions have fallen into negative territory for the first time, the survey found.
“The view is fairly pessimistic,” the chamber’s director of industry policy and economics Greg Evans told reporters in Canberra.
Overall demand is falling within the economy and that was now starting to feed through to employing full-time employees.
“We are obviously going exceed the seven per cent official forecast (for unemployment) by June 2010, probably by what might be up to two per cent,” he said.
One in five respondents to the survey said that changes to business lending criteria is affecting their capital expenditure plans and meeting working capital requirements of business.
“Access to finance is also now in the top ten of constraints on future investment by business,” Mr Evans said.
Credit flows were vital for economic recovery and dealing with the current downturn.