Australian business sentiment dropped to the lowest level since before last year’s election, National Australia Bank Ltd. said as its economists predicted the central bank will cut interest rates twice in 2015.
The confidence index dropped to 1 in November from a revised 5 a month earlier, a NAB survey of more than 400 companies taken Oct. 27-31 and released in Sydney today showed. The business conditions gauge, a measure of hiring, sales and profits, slid to 5 from 13.
The erosion reflects “firms’ uncertainty over the outlook for their industries,” NAB Chief Economist Alan Oster said in the report. A “softer commodities and labor market outlook mean we have changed our rate call to two cuts of 25 basis points in March and August 2015, then on hold until late 2016,” he said, predicting unemployment will peak at 6.75 percent.