Australian business confidence highest in years

SYDNEY - Business confidence across the Tasman jumped to a seven year high in the September quarter.

Sentiment bottomed out in early 2009, but it's been a remarkable turnaround since then.

Business conditions also continued to improve, although at a more subdued pace.

The National Australia Bank (NAB) monthly survey of business confidence grew by 20 points to plus-16 points in the three months to September, to levels last seen in early 2002.

"Business confidence in the third quarter jumped sharply," NAB group chief economist Alan Oster said in statement.

"New data in this survey point to a significant jump in both near and long term business expectations - with longer term expectations, in particular, returning to around long run average levels.

"But in marked contrast, investment intentions remain very subdued consistent with little real increase in capital spending over the next year."

NAB's business conditions index grew 14 points to plus-five points, as trading and profitability, and to a lesser extent employment, improved.

The third quarter readings compared to a confidence index of minus-four points in the June quarter and a business conditions index of minus-nine.

The survey also showed business profit expectations in Australia had returned to levels last seen in the first quarter of 2008, while employment confidence had returned to pre-global financial crisis levels.

The outlook for business conditions over the next three months grew to 14 points, from minus-six points in the previous quarter.

Over the next 12 months, expectations for Australian business conditions surged ahead to 28 points, from five points in the three months to June.

But anticipated capital expenditure over the next 12 months was at eight points in the September quarter.

This compared to indexes of two points in the June quarter and minus-12 points in the March quarter.

Employment expectations in "the lucky country" were still pessimistic in the September quarter, at minus-four points, although the result was a marked improvement on the minus-18 and minus-25 point readings in the second and first quarters respectively.

The survey's measure of profitability was at eight points in the September quarter, up from five points in the three months to June.

The survey of 930 firms was conducted from late August to Early September, NAB said.

- AAP