Confidence among firms fell 2 points to 54 in ANZ’s latest business outlook survey, while the measure of businesses’ own activity fell just 1 point to 48.
A reading of over 50 in the survey is traditionally very strong and suggests far more businesses expect economic conditions to improve than to get worse.
ANZ’s research team said confidence and own activity stayed high in August, but what was most encouraging this month was a lift in past activity.
The survey’s measure of past activity was 6 points to 16, thanks to a strong showing by the services sector this month.
ANZ said this suggests the bounce-back is already underway.
The survey showed inflation expectations were mixed, with oil prices continuing to have a large impact on the data.
Inflation expectations lifted from 3.14 percent to 3.26 percent, and more firms are expecting cost increases and to raise their own prices.
But ANZ said the size of expected cost increases is getting smaller.
Employment intentions were up slightly on the previous month’s numbers.
ANZ said overall the survey painted a picture of firms keen to get on with things despite a volatile global economic backdrop.
It said while cost and pricing intentions remained elevated, there was widespread optimism that the worst was past and that the economy was getting back on track.
Monday’s survey comes ahead of the Reserve Bank’s Monetary Policy Statement on Wednesday, where it is widely tipped to increase the cost of borrowing by 0.25 percent to 2.75 percent.