Australian business confidence increased in December, despite a worsening global economic outlook, a survey has found.
National Australia Bank's (NAB) monthly business survey showed business confidence increased even as the fallout from Europe's debt crisis continued to spook investors across the globe.
According to the survey, business confidence rose by one point in the month to reach +3 points.
Meanwhile, business conditions remained unchanged, indicating an economy growing at around trend, the survey found.
Conditions remained at +1, on the NAB's business conditions index, following an increase in November.
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The figure is consistent with the long-run average for the index.
Conditions were strongest in transport and utilities with index readings of +17 and +10, respectively.
However, conditions in the mining sector were weaker in December than in November, most likely due to weaker commodity prices.
Conditions also declined in recreation and personal services and retail - suggesting the Christmas period had not delivered the much-hoped-for boost.
The survey said the Reserve Bank of Australia's (RBA) decision to cut interest rates in November and December had helped narrow the gap between industries.
"While the gap remained divergent across industries, the gap between the strongest and weakest industries has narrowed over recent months," it said.
"The outcome for business conditions in December reflected improvements in trading conditions and profitability, which were offset by weaker employment conditions."
NAB said the survey suggested a slightly weaker start to 2012 and a cut to gross domestic product (GDP) and inflation forecasts.
"As a result our GDP forecast has been lowered to 3.75 per cent in financial 2012, (from 4.24 per cent) but is broadly unchanged at 3.25 per cent in 2013.
"We now see the RBA lowering cash rates twice in 2012."
