Business conditions remained relatively stable in September despite the turmoil that engulfed financial markets, a survey says.
The National Australia Bank monthly business survey's measure of business conditions rose two index points to minus-one point in September, seasonally adjusted.
Business conditions were 21 index points below its recent peak of October 2007.
The survey's measure of business confidence declined one index point to minus-eight points.
The survey of 400 firms across the non-farm business sector was conducted between September 23 and 30, a period when the US government's $US700 billion ($A1.01 trillion) Troubled Assets Relief Program (TARP) was being debated by the US Congress.
It was also conducted before the Reserve Bank of Australia's aggressive 100 basis point easing of the cash rate to six per cent and a subsequent coordinated round of interest rate cuts by some of the world's largest central banks.
"In those circumstances it is perhaps remarkable that business confidence (if not conditions) did not seriously deteriorate in this survey," NAB group chief economist Alan Oster said in the report.
The survey found business conditions and business confidence were broadly unchanged in trend terms.
"That is a very different response relative to both equity markets and measures of consumer sentiment," Mr Oster said.
The survey found business conditions in the mining industry had improved in September, but confidence fell sharply due to sliding commodity prices.
The survey also found wages rose by one per cent in September, on a three-month seasonally adjusted basis, which was down from 1.3 per cent the previous month.
As a result, the annual rate of wages growth eased 0.1 percentage points to 5.3 per cent.
Although only marginal, Mr Oster said this was the first time in 2008 the annual rate had fallen.
"A sharp slowing in demand, capacity utilisation, and profits also means that the scope for more aggressive wage outcomes will dissipate - and indeed that wage outcomes will slow from here," Mr Oster said.
Mr Oster said apart from the mining, construction and transport industries, there was a "general trend to flat or falling wage inflation".
The monthly survey also includes NAB's latest forecasts for global growth and monetary policy.
NAB expects Australian gross domestic product (GDP) to remain unchanged at 2.5 per cent in 2008, but to slow to 1.25 per cent in 2009, compared with its previous forecast of 2.25 per cent.
The back expects core inflation to print at 4.5 per cent in the September quarter and "around four per cent" by the end of 2008.
In terms of monetary policy, NAB forecast a 50 basis point cut at the RBA's November meeting, with the cash rate falling to five per cent by March next year and 4.5 per cent by July 2009.
The cash rate is currently at six per cent.
There were also large downward revisions in the near-term outlook for the US and UK.
"These revisions are driven by the lagged impact of lower equity markets and continued disruption of global credit markets," the report said.
