Oz confidence steady but job growth slow

Australian business confidence was unchanged in November. Photo / Supplied

Australian business confidence was unchanged in November as Europe's deepening sovereign-debt crisis offset the Reserve Bank's first interest-rate cut in 31 months, a private survey showed.

The confidence index was 2 last month, the same as in October, according to a National Australia Bank survey of about 550 companies from November 21-25 that was released in Sydney yesterday.

The business conditions gauge, a measure of hiring, sales and profits, rose to 1 from zero. The nation's central bank reduced the benchmark rate by a quarter percentage point on November 1 and again on December 6 as inflation pressures eased and risks to global growth increased.

Australia is headed for its worst annual jobs growth in 15 years as consumers boosted savings amid concern about potential fallout from fiscal problems in the US and Europe.

"At the time the monthly survey was taken, the RBA had lowered the cash rate by 25 basis points, but European debt woes continued during the month,'' NAB chief economist Alan Oster said.

RBA Governor Glenn Stevens lowered the overnight cash rate target to 4.25 per cent from 4.5 per cent last week, citing "considerable turbulence'' in financial markets and an increased chance of a "further material slowing in global growth''.

Traders are betting Stevens will lower borrowing costs again at the central bank's next meeting in February, interbank cash-rate futures show.

Payrolls gained 44,700 through the first 11 months of this year, on pace for the smallest growth since 1996 after a record 362,300 increase in 2010, government data showed last week. The report contrasted with figures showing the biggest six-month gain in economic growth since March 2007.