Business conditions positive

Business conditions rose for the fourth straight quarter in the three months to March, reaching their highest level since late 2007, a new survey shows.

The actual composite index of the Australian Chamber of Commerce and Industry (ACCI) Westpac survey of industrial trends rose 6.3 points to 56.7 in the March quarter.

The index is above the average for the decade of 52.0 for the first time since mid-2008.

Releasing the data on Wednesday, Westpac senior economist Anthony Thompson said being above the decade average signals expanding activity at an above trend pace.

"The current level of the actual composite index has a good relationship with overall domestic final demand in the economy," Mr Thompson told reporters in Canberra.

"It's pointing to a strong acceleration through this year."

Expectations for the June quarter outcome were 63.6 points, a record high for this index that commenced in 1974.

The survey was concluded last week amid accelerating growth in domestic demand, a still-high Australia dollar and the Reserve Bank of Australia's (RBA) decision to lift the official cash rate, he said.

ACCI director of economics and industry policy Greg Evans cautioned against being overly optimistic in the wake of the result.

"In this survey and other surveys we have seen the phenomena where expectations haven't necessarily been met by subsequent performance," Mr Evans told reporters in Canberra.

"The economy is in the early stages of recovery, it is somewhat uneven, and in fact there's some risks with respect to that recovery."

Those risks include the end of the government's stimulus measures and manufacturers' access to finance curbing demand in the quarters ahead.

He noted that new orders and production were flat in the quarter, while export deliveries fell.

"Some 62 per cent of respondents indicated that new orders were constraining their production," Mr Evans said.