Businesses are becoming more optimistic, despite talk of a tough federal budget.
Business confidence lifted in April, while actual business conditions fell, according to National Australia Bank's monthly survey.
Confidence rose two points to six but conditions fell one point to zero last month.
The rise in confidence was surprising given the negative rhetoric about a tough budget and the persistently low level of business conditions, NAB chief economist Alan Oster said.
He said the deterioration in business conditions was driven by the mining industry, which had faced declining iron ore prices in April as well as soft coal prices.
Conditions were also negative for retail and construction, despite low interest rates, he said.
"This suggests other negative factors, particularly the soft labour market and receding mining investment boom, are still more than offsetting accommodative monetary policy," Mr Oster said.
UBS economists Scott Haslem and George Tharenou said the high Australian dollar was holding down business conditions down.
"The significant rebound of the Australian dollar is likely stopping conditions moving into positive territory," they said.
"Looking ahead, we still expect US Federal Reserve policy normalisation and a lower trend in commodity prices to see the currency depreciate, which historically boosts conditions."
JP Morgan economist Ben Jarman said it was surprising that businesses were more optimistic, despite the tough budget talk.
But next month's report would reveal the budget's true impact on confidence, he said.
"Next month's report will be important in gauging whether firms are still as relaxed about the fiscal settings after the hard details are announced," Mr Jarman said.
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