Australia's business confidence remained unchanged in April ahead of the Federal Budget tomorrow, latest monthly survey from the National Australia Bank showed Monday.
The business confidence index came in at 3 in April, the same reading as in the previous month.
Consequently, confidence levels need to lift from here before any meaningful economic recovery can gain traction. The RBA's rate cut in May should contribute to better confidence in coming months, although the response following the February cut suggests the impact may again be muted, the Bank said.
At the same time, the trend in business conditions dropped slightly to 4 in April from 6 in the preceding month.
Although conditions eased slightly, the trend has been broadly unchanged, to increasing slightly, which is consistent with the indefinite signs of improvement in some of the recent economic data.
"Economic forecasts will be updated following the Federal Budget tomorrow, but are unlikely to change much from last month's," Alan Oster, Chief Economist at NAB, said.
"Recent signs of improvement in the economic partials are encouraging but the non mining sector needs to lift more to offset the impact on domestic demand of sharply lower mining investment and the hit to income from commodity prices."
"The RBA's rate cut in May was a line-ball decision in our view, but with partials improving and inflation expected to remain relatively subdued, the RBA is likely to remain on hold for some time unless unemployment rises more than expected."
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