NAB says the deterioration in conditions was reported across most sub-sectors within agribusiness, with the largest decline experienced in manufacturing, wholesaling and transport.

Below average rainfall in many areas during autumn resulted in a decline in agribusiness confidence in major commodities and suppliers.

Confidence in wheat declined (down 22 points to an index of 26) reflecting a downward revision to 2008-09 winter crop production estimates.

A drier than usual autumn and a steady decline in global sugar prices since late February resulted in confidence in sugar falling (down 7 points to 4).

Despite strong global prices, confidence in cotton declined (down 10 points to -3), as the size of the recovery in domestic cotton production in 2008-09 remains unclear.

For wool, a decline in prices combined with expected lower production in 2008-09 resulted in a loss in confidence (down 18 points to -9).

For livestock, high grain prices and limited pasture availability continue to hamper confidence levels.

With opening stock numbers for June 2008 forecast to be lower, following drought conditions across much of Australia, production of both beef and lamb in 2008-09 is forecast to be lower.

Reflecting these factors, confidence in beef and lamb declined (down by 9 and 2 points respectively to 10 and 12).

Surprisingly, confidence in dairy also declined, despite high farm-gate milk prices and expectations of increased milk production in 2008-09.

The loss in confidence in most commodities flowed through to farm equipment and to a greater extent chemicals (down 1 and 27 points respectively to 20 and 15).

Overall agribusiness's confidence in their own industry (post farm gate) declined by 5 points to an index of -4 — about the same as across the non farm business sector as a whole.