Business confidence fell to +4 in March from +7 in February, while business conditions rose to +1 from zero in National Australia Bank's monthly business survey.
"Australian business conditions remained soft in March and there are signs the weak environment is taking a toll on business confidence, which continues to slide," Alan Oster, group chief economist at National Australia Bank, said. "Labor market indicators are weak and, although better than in the depths of mid-2013, still look too soft to prevent a further deterioration in the labour market."
The data showed a post-election surge in business confidence in Australia continued to abate as the resource-rich economy struggles to adjust to a fall in mining investment after the end of a decadelong mining boom.
"Soft forward orders and headwinds from weak business investment and a deteriorating labour market also suggest that this trend may continue over coming months," Mr. Oster said.
Despite positive confidence readings for most industry sectors, including wholesale, services, construction, and retail, the heavyweight mining sector remains deeply negative, Mr. Oster said.