Business confidence remains high

AAP Businesses confidence is high, helped by subdued cost pressures and better consumer confidence.

A surge in optimism among construction companies is keeping overall business confidence high.

The August reading of the NAB business confidence index came in at eight points, with readings above zero indicating optimists outweigh pessimists.

While the index dropped two points from a one-year high in July, JP Morgan economist Ben Jarman said business confidence remained high.

"Australia's NAB business survey had been surprisingly upbeat in July, but suffered some payback in August," he said.

"In the sector breakdown, mining representatives are keeping their chins up, despite the slide in commodity prices."

Confidence was strongest in the construction sector and Mr Jarman expects it will continue be the main driver of business confidence as the year progresses.

"The approvals data clearly show a bulge in the pipeline of residential building, and in construction of office and retail space, which will offset some of the mining capital expenditure decline," he said.

"But we doubt that is yet sufficient to lift demand conditions more broadly, and that sense is corroborated by the pullback in conditions reported today."

NAB's business conditions index fell to four points in August, after it hit a four and a half year high of eight points in July.

Visit link:
Business confidence remains high