Companies' confidence has now slid for 10 months in a row.

Last month's decline accelerated, though, with National Australia Bank's survey plunging 21 points to minus-29 from minus-8.4 in September.

A negative reading indicates that pessimists outnumber optimists.

"Continuing volatility in global equity markets, emergency financial packages, falling commodity prices, and continuing talk of a global recession have finally broken business optimism and now fear reigns supreme," said NAB group chief economist Alan Oster in a statement.

"Indeed it is worth noting that confidence readings are worse than the bottom of the 1990s recession has more to do with fear of the unknown than actual current outcomes."

Australian companies are paring back production as orders shrivel at home and abroad.

Alumina today became the latest firm to announce cut backs, with plans to reduce its aluminium output.

Rio Tinto and Fortescue yesterday announced a reduction of about 10pc in iron-ore production in part because of slowing demand in China.

The Reserve Bank yesterday lowered its growth forecast to 1.5pc in 2008-09 from its 2.25pc forecast made in August.

That estimate undercut the Rudd Government's own target of 2pc announced last Wednesday.

Confidence withers but CEO pay holds up

For corporate leaders in Australia, the weakening environment has not yet translated into lower pay.

Chief executives of the top 300 listed companies averaged $2.97 million in the year to June 2008, a gain of less than 1pc, from $2.96 million, according to the Australian Financial Review.

Over the same period, though, the S&P/ASX 200 plunged 16.9pc.

Bad news for Australian stocks continued today, with the main index falling below 4000 points after another retreat on Wall Street and China's rescue package failed to inspire investors.