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A survey of small and medium businesses across the Tasman has recorded the most buoyant outlook for the Australian economy in two years.
The quarterly Sensis Business Index has found businesses' overall perception of the current state of the economy has risen 18 points to 32 per cent.
And the forecast for the next 12 months improved 24 points to 13 per cent.
Meanwhile, business confidence is also improving, but remains weaker than 12 months ago.
The report's author, Christena Singh, says small businesses are also more optimistic about their own interests.
"In terms of small businesses' own prospects, they're fairly confident and in terms of the economy, they're very bullish at the moment," she said.
"So we are seeing overall a strong level of confidence, despite these ongoing concerns about the drought."
The Sensis report found business confidence in New South Wales in the last quarter was at 47 per cent - the lowest figure of any state.
Ms Singh says business confidence outside Sydney is also concerning.
"When we look at business confidence in regional New South Wales, we're measuring confidence of only 20 per cent," she said.
"That's a net balance of 20 per cent and that's the lowest confidence level of anywhere in Australia.
"That compares overall with confidence in New South Wales on average at 47 per cent."
Ms Singh says only 20 per cent of small businesses in regional NSW are confident about their prospects, and the results continue a trend of poor results for the state.
"We've seen New South Wales business confidence measured in the Sensis business index at the lowest level of any state or territory for 10 of the last 11 quarters now," she said.
That translates to small business support for the NSW Government slipping 10 percentage points, making it the least popular government by a 20 per cent margin.
The Federal Government is by far the most popular among businesses of all governments, followed by the Northern Territory.
- RADIO AUSTRALIA
