The Australian business conditions improved with an outstanding growth in sales and profit. The business confidence shot up to its maximum in more than seven years in the third quarter survey.

“New data in this survey point to a significant jump in both near and long-term business expectations -- with longer-term expectations, in particular, returning to around long-run average levels, but in marked contrast, investment intentions remain very subdued consistent with little real increase in capital spending over the next year.” said Alan Oster, chief economist at National Australia Bank.

A vigorous export demand from the biggest trading partners China has helped Australia to practice improved business conditions and a huge pick up in global activity and furthermore sustaining the sectors, hardest hit by the global downturn, such as mining, manufacturing, construction and wholesaling.

The viewpoint for business conditions increased to a reading of five points from minus six, while profitability rose to eight points from minus five.

According a survey, the growth in unemployment or paring back of hours worked is expected to be stopped, given that employment expectations have rebound sharply to minus four from minus
18. Consequently, a climb in the position of capital expenditure plans over the coming year, which gained a modest six points to a reading of eight.

In the 2009-2010 fiscal year, NAB is forecasting the economy to grow 1.25 per cent, with unemployment rising to 6.75 per cent and the Australian dollar peaking at $US1.02.