Business confidence up, new figures show

Wednesday, 15 Aug 2012

Organisations across Australia were feeling more confident about operating conditions in July, following the effect of positive economic news from Europe on financial markets.

This is according to the National Australia Bank (NAB) Monthly Business Survey, which found firms were spurred by cuts in the interest rate and encouraging data from around the world.

While the Reserve Bank of Australia maintained the current key cash rate at 3.5 per cent, it had dropped by 0.25 percentage points in June and 0.5 percentage points in May.

NAB's confidence index registered a mark of four in July, following readings of minus three in June and minus two in the month previous to that.  

The financial institution stated that European policy deciders continued to make positive comments that have galvanised many businesses. 

"It appears recent talks in Europe have provided some relief to financial markets, which is resonating through to an improved outlook for global demand," the bank explained.

The introduction of the carbon tax was adequately overcome, it added, which also boosted optimism across a number of sectors.

However, some industries still encountered problems, with retail and wholesale being particularly affected due to government stimulus packages to households running out in June.