Businesses in Western Australia are the most confident in the country, with the state registering a lead of more than 10 index points according to the latest National Australia Bank survey.
The national business confidence index gained four points to plus-19 points in February, with WA booking a confidence level of plus-26 points while other states were within a range of between plus 12 to 14 points.
Victoria was the only state to record a drop in business confidence during the month.
It was the national survey's highest level since November 2009 when it also touched plus 19 points, which at the time was a seven-year high.
"The latest survey indicates at least a partial bounce back in both confidence and conditions," NAB group chief economist Alan Oster said in a statement today.
"It is possible that, just as the extent of the slowing in January may have been unexpected, so the uptick in February took many businesses by surprise, with some de-stocking in the face of stronger trading conditions and a slight fall in the employment index."
Business and trading conditions grew five points to plus eight in the month, while profitability was at plus seven, up from plus two in January.
The employment index slid one point to plus five but was still above long term average levels, the survey said.
Confidence rose sharply in mining, retailing, wholesaling and transport.
In trend terms, however, confidence was highest in the mining industry but weakest in retailing and recreation/personal services.
"These results may reflect stronger global demand for commodities and the impact of higher interest rates on consumer spending despite the absence of the widely anticipated interest rate increase in February."
In February, most market economists expected the Reserve Bank of Australia would take the cash rate 25 basis points higher to four per cent.
But the bank held off until March, when it lifted the rate to its current 4 per cent.
Meanwhile, forward orders rose 10 index points to plus six.
