Research from National Australia Bank (NAB) has indicated that general conditions for Australian businesses are at their worst since the global financial crisis (GFC) back in 2008.

Such sentiment has been under discussion for some time, but it was mostly speculation by analysts or linked to other factors such as the dropping real estate market and the trouble that Australia’s banks are in with the Royal Commission.

According to NAB, the retail industry is performing the worst in the country right now, which is concerning following the month of December, when the industry should be at its best because of Christmas sales.

General business conditions have taken an overall hit in the last month that NAB has not seen since the GFC, which bluntly sums up the kind of a tailwind that the Australian economy is in right now.

The conditions that the bank measures showed a huge 82% drop from November to December, and the sliding scale that NAB uses to track these conditions dropped from +13 to just +2.

NAB Chief Economist Alan Oster admitted that this is not positive news and pointed to the ‘broad-based’ drops in figures across the board, meaning that one industry in particular is not weighing the others down. Although retail had the sharpest decline, the sector’s performance is merely part of a much wider trend.

Many recent economic conditions have indicated that this slump would take place, some of which were outside Australia’s control. The ongoing US-China trade war is now hitting exports and imports in the country, and the industries that rely on shipping items in and out of Australia are now finding themselves harmed by a jittery global market.

In addition, circumstances are not exactly rosy for Australian banks. They have all faced intense criticism from the Royal Commission inquiry, which exposed how the banks pushed sales over customer service to a large extent. Profit margins are now suffering as a result.

As part of the banks’ aim to bring financial numbers back into healthier areas, they have scaled back some of their riskier credit lines, which means that households and businesses alike are no longer necessarily getting access to the same liquidity that they did previously. This can have a serious effect on the ability of a business to weather the financial impact from a lack of sales or investment in the market, so Australia’s problems could get even worse.

Oster noted that retail’s weakening economy is ‘suggesting an ongoing deterioration in activity in the sector,’ which indicates that it is likely to be the worst hit by global market trends.

However, on a positive note, the mining industry seems to be doing well in index terms, as it bounced up to a healthy +22. Its stronger conditions may well be due to how much Australia is able to produce on its own soil without having to worry about supply chain links to other nations.

Some industries may have better protection than others in withstanding economic storms. Several worrying sub-indices were also on show, as employment dropped by 56% and trading conditions went down 53% to reach +4 and +7 respectively. However, the worst drop was for profitability, which has now hit zero on NAB’s index.