BUSINESS conditions in Australia have slumped to a four-year low and are "very bad" in retail, mining and manufacturing, the National Australia Bank says.

South Australian conditions were ranked the worst in the nation, at minus 12, where a 0 rating is neutral.

This was almost twice as bad as the nearest states, Western Australia and New South Wales, which ranked minus seven.

The NAB said forward orders and employment were still "very poor'' and low interest rates and the falling dollar had shown little effect so far.

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"The June survey paints a worrying picture of the Australian economy; business conditions slumped in June to their lowest level since May 2009,'' the NAB Monthly Business Survey says.

"Weaker trading conditions and profitability combined with still poor employment conditions drove business conditions lower, with each of these indicators remaining well below average levels.

"Conditions deteriorated heavily in mining, retail and manufacturing (despite a tumbling Australian dollar). Weak forward indicators - including forward orders, stocks, capacity utilisation and employment conditions - remain concerning and suggest little improvement in near-term demand.''

Business confidence increased marginally in June, but remained "lacklustre''.

"The falling Australian dollar appears to have done little to lift spirits, with concerns about global economic conditions likely to be weighing. Overall weakness in domestic economy also likely to be worrying firms.''

A slight positive for debt holders is that NAB has brought forward its forecast for another official interest rate cut to August from November.