While business conditions continue to remain soft they did improve in the September quarter for most industries, according to the National Australia Bank quarterly business survey.

The most notable improvements in conditions were in transport & utilities, manufacturing, construction and retail – with these sectors starting to benefit from the impact of lower borrowing costs. Furthermore, it is likely that some benefit from government carbon tax compensation payments made to households in May and June boosted activity in the consumer dependant sectors at the beginning of the September quarter.

Despite this, retail still falls in the category being a weak category along with manufacturing, construction and wholesale. However the gap between the strong and weakest performing industries has narrowed over recent quarters but remains large.

In levels terms, business confidence was highest (and positive) in transport & utilities, followed by retail, while it was weakest in mining, manufacturing and construction

Meanwhile, product price inflation ticked up a little in the September quarter – up 0.1 ppt to 0.2 per cent. Retail prices increased marginally up 0.1 ppts to 0.1 per cent; the trend in the quarterly NAB retail price series is broadly consistent with official underlying inflation data, and points to another soft inflation outcome in the September quarter