Businesses are gaining confidence, but it's difficult to see what they're happy about.
The number of businesses that increased sales in the September quarter fell to 38 per cent from 43 per cent in the previous quarter, according to the latest Dun and Bradstreet business survey.
However optimism is still strong, with 74 per cent of businesses saying they are more optimistic about growth in the next 12 months compared to the last 12 months.
Dun and Bradstreet chief executive Gareth Jones says business optimism is improving despite outcomes in sales and profits not meeting the expectations that were expressed earlier in the year.
"Business activity this year has been steady, with our survey revealing that most indicators are up on last year's levels," he said.
"The recent separation in expected and actual business performance, however, suggests that the business environment is, in reality, still weak."
Mr Jones said if this trend continues and consumer confidence remains weak then there is a chance that business confidence will start to fade.
Dun and Bradstreet economic adviser Stephen Koukoulas said below average economic growth is disappointing businesses.
"The biggest gap between expectations and actual results are in the two most important components of the survey, sales and profits," he said.
"The reality of a soft economic growth, very low inflation and global weakness appears to be dashing the optimism of the Australian business sector."
Mr Koukoulas is hoping that interest rates staying low, and the falling Australian dollar will result in a pickup in economic activity in the coming quarters.
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