Australian business confidence rose in May to its highest level in 15 months, boosted by signs of improvement in global financial markets and an increase in the national infrastructure budget.
The National Australia Bank's monthly survey, released Tuesday, showed business confidence rose 12 index points but was still below zero at minus two points in May. The below-zero reading shows there were still more pessimists than optimists in the survey of more than 560 companies.
But the business confidence level was at its highest since February 2008.
"Businesses are starting to think Armageddon is not around the corner," said NAB chief economist Alan Oster.
He said the results reflected a rise in global share markets, higher commodities prices and a loosening of tight credit markets.
"These stronger market trends are in line with the incoming economic data which suggest that the global economy could be about to stabilize," Oster said.
He said further stimulus from the federal budget, particularly 22 billion Australian dollars ($17 billion) to build roads, railways and schools, had also contributed to the confidence boost.
The survey was released a week after the Australian Reserve Bank released a report that showed Australia's economy was one of only a few, including China and India, that grew in the first quarter.
However, the survey's measure of business conditions did not keep up with the confidence ranking, falling four index points to minus 14 points.
Firms remained reluctant to build up stocks and instead continued to cut inventories across the manufacturing, construction, retail and wholesale sectors, the report said.
Capacity use also remained weak and wages recorded a slight fall in the three months to May, according to the report.
"There is no clear evidence that the tentative mood has receded from business plans," the report said.
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