The "retail recession" is getting deeper and is now worse than anything faced by the sector during the global financial crisis, a key survey of the nation's businesses has revealed as the Reserve Bank grows confident its interest rate cuts are flowing through to borrowers.

Ahead of key wage and job figures this week, the closely-watched NAB business survey showed trading conditions and confidence remaining weak with a concerning drop in employment plans by the nation's firms.

Retail recession is getting deeper, NAB's business survey suggests, but the RBA is confident its rate cuts are flowing through to borrowers. Credit:Dominic Lorrimer

The toughest sector remains retail where profits, trading conditions and employment intentions weakened through July despite the impact of the government's personal income tax cuts and the reduction in official interest rates.

Car retailing, food and household goods are all very weak with profit margins for many retailers being squeezed while sales slip. The volume of total retail sales is now at a level not seen since the 1990-91 recession.