SYDNEY (REUTERS) - Australian business confidence rose significantly last quarter as worries about the health of the global economy eased, while conditions strengthened modestly as sales and profitability improved, a private survey showed on Thursday.
The quarterly survey of over 900 firms by National Australia Bank found the improved optimism also reflected stronger equity prices and lower borrowing rates at home, but trade-dependent industries continued to fret about a high local dollar.
The survey's main measure of business confidence jumped to 2 from -5 in the fourth quarter, marking its first quarterly rise since December 2011. Its measure of business conditions edged up 3 points to -2 over the quarter.
"That said, business conditions are still clearly signalling below trend growth," said Mr Alan Oster, chief economist at NAB.
"More worrying, forward indicators of demand remain subdued - notably forward orders, stocks and capital expenditure - suggesting activity will soften into the June quarter."
There were already signs of that happening in the March monthly survey, Mr Oster said.
Indeed, NAB's monthly version of the survey released last week showed the conditions index dropped 4 points to -7, while the confidence index edged up a point to 2 in March.
The survey also found business investment intentions rose in the quarter, but still implied flat investment growth over the next 12 months.
NAB said that is consistent with declines in commodity prices, which have brought into question the viability of a number of prospective mining projects.
Since lowering the cash rate to a record low 3 percent last year, the Reserve Bank of Australia (RBA) has held off on more cuts so far in 2013, saying it was prudent to wait and assess the impact of past easing.