Australian business confidence pulled back in February but sentiment remains more upbeat compared to late 2012.
National Australia Bank's monthly business survey, released this morning, showed business confidence fell two points in February to an index reading of one.
A reading above zero indicates optimists outnumber pessimists among those businesses surveyed, so the latest result shows business confidence is in mildly positive territory.
NAB chief economist Alan Oster said confidence remained below its long-run average, but was still above the minus nine index level seen in December 2012.
He said the fall in sentiment was a slight pullback from the sharp increase seen in January.
"While the general mood of business is more upbeat than it was towards the end of 2012, the pullback in sentiment in February probably reflects a return to focus on what is actually happening on the ground," he said.
Confidence fell in all sectors apart from the finance sector, which benefited from improved funding costs and market stability, Mr Oster said.
The NAB survey also found business conditions weakened slightly during February, down one point to minus three index points.
Mr Oster said conditions remained difficult in many industries, especially construction, which is suffering due to weak investment in sectors not linked to mining.
He said there was little indication conditions would improve over the next few months, despite a recent improvement in consumer confidence.
"Combined with still low capacity utilisation, stocks, employment and capital expenditure readings, forward indicators imply little improvement in near-term demand," he said.
According to the NAB survey, confidence was weakest in the wholesale sector in February, with an index reading of minus nine points, and strongest in the finance sector (+12 points).Conditions were most subdued in construction (-14 points) and strongest in recreation and personal services (plus eight points).
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