Australian firms are heading into Christmas on a pessimistic note, with business confidence slumping to its lowest point since the global financial crisis.
And with little relief in sight, the Reserve Bank of Australia could be forced to cut the cash rate again, possibly as early as February.
National Australia Bank's latest monthly business survey of 600 companies showed confidence levels were the lowest since April 2009, when the country was emerging from the GFC.
Confidence levels were down across the country, most notably in Queensland and South Australia.
Of the eight sectors surveyed, manufacturing reported particularly tough conditions.
Confidence remained weakest in the mining sector, hinting that uncertainty about China's economy and global commodity prices was taking its toll.
The survey found business confidence fell to an index level of minus nine in November from minus one in October, indicating pessimists far outweighed optimists among those surveyed.
At the same time, business conditions remained flat at minus five points, with an improvement in the wholesale and manufacturing sectors offset by a decline in transport and utilities.
NAB said local businesses appeared worried about Australia's economy, which grew by a lower-than-expected 0.5 per cent in the September quarter.
"The slump in confidence is likely to in part reflect businesses becoming depressed about the weak level of activity in the economy at present, while concern about the outlook for Australia's mining sector may also be playing a part," NAB said in a statement.
The mining states of Western Australia, Queensland and South Australia recorded drops in business conditions, possibly as a result of falls in commodity prices.
Conditions in the mining sector as a whole also fell for the fourth consecutive month.
Looking ahead, NAB said the economy would remain sluggish in 2013, with the RBA under pressure to cut rates once more to stimulate growth.
"Softening resources investment, a still-elevated Australian dollar, fiscal tightening and very weak confidence are expected to weigh on near-term activity," it said.
"The future path for the cash rate appears lower now than it was a month ago. We now see potential for a further reduction next year (May, but February if conditions worsen), taking the cash rate to 2.75 per cent."
At its board meeting on December 4, the RBA cut the cash rate by a quarter of a percentage point to three per cent, its lowest point since the GFC.
JP Morgan economist Ben Jarman said the central bank's easing cycle - which includes previous cuts in May, June and October - had done little to boost Australia's economy.
"In general there still is little sign of traction from the 175 basis points of easing delivered so far, save for the recovery in consumer sentiment in recent months," he said.
"And that is irrelevant without an improvement in spending, which clearly has not occurred yet."
NAB forecast that global growth would remain in the doldrums, at 3.1 per cent in 2012 and 3.2 per cent in 2013.