Australian business confidence has lifted to its highest level in more than two and a half years.
And, business conditions during the three months to December were at their strongest in more than 12 months, lifting from -7 to -3, the National Australia Bank quarterly business survey has found.
The post-election honeymoon continued well into the December quarter, helping to prop up confidence, which has risen to +8 from +5, the findings indicate.
But the positive sentiment was also helped by a stronger housing sector (driven by investors), higher asset prices, a lower Australian dollar and interest rates.
However, while confidence rose in the quarterly business survey, the monthly survey suggests it has lost some momentum.
The NAB says business investment growth may lift modestly in the next 12 months, based on business capital expenditure, but warns that mining was under-represented in the survey.
“The degree of slowing in mining investment may not be fully captured,” it said.
The survey found that business activity is starting to respond to signs of improvement in pockets of the economy, although broader conditions remain at lacklustre levels.
The mining sector’s conditions index rose most sharply although, NAB says, the reading remained “uninspiring,” suggesting ongoing consolidation of Australian mining operations.
It also says green shoots in the housing sector has not offset the passing peak in mining investment.
Activity improved in the transport and utilities sector, a bellwether of demand, but overall conditions were described as subdued.
Conditions were weakest in wholesale, where the depreciating local currency can be most damaging, the survey said.