A closely-watched survey reveals that business scenario slowed sharply in January, as trading and profits weakened after three interest rate rises. It measures business conditions fell 7 points to 3 points in the month.

Business confidence has bounced back to very high levels in January, the National Australia Bank Monthly Business Survey and Economic Outlook for the month showing a seven point increase to a reading of plus 15.

The result was triggered by a 14 point fall in trading conditions to 3, and a 10 point fall in profits to 2 index points.

The retailing and mining sectors in particular posted weak business conditions, while forward orders were reported to slip by 11 points to a reading of minus four, outlining a return to levels last seen in the middle of last year.

Capital expenditure was again registered a weak position in January while Oster notes credit conditions also eased further, to the extent the difficulty in finding finance index was at four points, lower by one point from December.

The NAB's chief economist, Alan Oster, said, "This looks like an unexpected slowdown, businesses sort of haven't caught up with it, they're still employing on the basis of what happened at the end of last year, their confidence levels are still reasonably good but you know we really do need to see what happens next”.