Things are getting better for Australian businesses, with confidence still at elevated levels and trading conditions on the improve.

The National Australia Bank business survey for the March quarter found business confidence fell two points to six points.

A reading above zero indicates optimists outweigh pessimists.

Despite a dip in confidence in the first three months of the year, it was still a positive result, NAB chief economist Alan Oster said.

“Confidence has been generally trending higher across the board and is still positive for most industries,” he said.

“Mining is still the only sector to have a negative confidence index.

“An anticipated decline in many commodity prices, coinciding with rising global supplies and a moderating demand outlook for China, is weighing on mining firms.”

Business conditions rose to their highest levels in 18 months, up two index points to zero.

Oster said business conditions were still soft however, despite gradual improvement.

“Forward indicators point to further modest improvements over coming months, but still indicate below trend rates of growth and soft demand for labour,” he said.

“Despite a lift in trading conditions, weak demand continues to be the biggest constraint on output, with almost 60 per cent of firms reporting a want of sales and orders.

“This may start to ease over coming quarters with firms starting to report improving forward orders.”

AAP