Business confidence down on US, China fear Conditions are still very subdued in trade and consumer-dependent sectors. BUSINESS confidence has fallen back in the last three months amid fears about a slowdown in the Chinese economy and the tapering of US economic stimulus. The National Australia Bank's latest quarterly survey shows business confidence fell from 2 in the March quarter to -1 in the June quarter. Business conditions also slipped, from -3 to -4, remaining at close to a four-year low. NAB said conditions were still very subdued in trade and consumer-dependent sectors, with little sign that lower interest rates and the falling Australian dollar were helping. Although business confidence was better than last year, it remained below long-run average levels, NAB said. "During the June quarter, equity prices were paring back earlier gains, speculation about the US Fed tapering stimulus plans were intensifying and softness in Chinese activity data was becoming more entrenched," NAB said. These factors are likely to have weighed on sentiment of domestic firms. NAB said the fall in business conditions reflected weaker employment and trading conditions. Conditions deteriorated most notably in mining, manufacturing and retail while activity strengthened in wholesale, transport and recreation and personal services. "Already subdued forward indicators of demand generally weakened in the second quarter, especially employment conditions and capacity utilisation, providing little sign that activity will improve into the second half of this year," they said. NAB said that although investment intentions in the non-mining sector had generally improved, the lift was not likely to be sufficient to fill the gap from the decline in mining investment.