Australian business conditions and confidence are slightly better but still at fairly weak levels, especially in the mining sector, a private survey shows.
The National Australia Bank's quarterly survey showed the business conditions index for the September quarter was plus one, up from minus two in the June quarter.
Business confidence rose to minus two in the quarter, up from minus three in the previous quarter.
Business conditions in some of the consumer dependant and housing related industries improved in the September quarter, most probably helped by recent interest rate cuts by the central bank.
However, NAB chief economist Alan Oster says the story is different for the normally reliable mining sector.
"While the mining sector remains a big part of Australia's growth story, it appears that a slowing in global commodities demand and prices are now impacting on mining activity and confidence," he said.
"It appears that global uncertainties, the persistently high Australian dollar, weak forward orders and the impact of fiscal consolidation (state and federal) are weighing on firms' future expectations."
Mr Oster said investment intentions for the next 12 months have weakened a touch, in line with slower business investment growth.
"Near-term and long-term employment expectations remained lacklustre and consistent with our expectation for little near-term employment growth," he said.
"Lack of demand is expected to be the most significant factor impacting on profitability over the year ahead."
NAB has made little change to its global and Australian economic forecasts.
Mr Oster expects the Reserve Bank of Australia to cut its interest rate one more time in 2012, at the November board meeting, and said there should be another cut early in 2013, taking the rate to 2.75 per cent.
The RBA's latest reduction was at the October meeting by a quarter of a percentage point to 3.25 per cent.It was the fifth interest rate cut by the RBA in 12 months and the minutes of the meeting said it was in response to weaker commodity prices and lower levels of investment by mining companies.
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