A key business lobby group is concerned about the employment outlook even though the change of federal government improved overall confidence.
The Australian Chamber of Commerce and Industry's latest survey of investor confidence found business owners at their most confident since December 2010.
"We are continuing to see this improvement in expectations flying from a new government and a new administration with different economic agenda," chamber chief economist Greg Evans said in Canberra.
However, an improvement in actual trading conditions was more modest.
Expectations for sales, profitability and the investment outlook all grew in the month but expectations for employment deteriorated.
The survey's expectation index rose to 59.2 points in the September quarter from 55.7 points in the previous three months, while the actual conditions index crept up to 50.8 points from 49.9 points.
Even so, this was the first time the conditions index rose above the key 50-point mark, which separates expansion from contraction, since March 2011.
Sales and profitability remained locked at contractionary levels.
Mr Evans said business still faces some fairly stiff economic headwinds in terms of international uncertainty, an Australian economy that is expected to continue to grow below trend and an unemployment rate that could go above six per cent in 2014.
While he believes the full benefit from lower interest rates has yet to be fully locked in, the chances of another rate cut have "probably evaporated".
He said there is still scope for greater competition among banks, particularly in terms of business loans and overdrafts.
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