Business conditions 'are only slightly improved'

Trading conditions across Australia improved marginally in the first quarter of 2012, although the country's economic growth remained broadly flat.

Many companies have bemoaned the high value of the Australian dollar in recent months, as people are finding it far cheaper to buy goods from overseas.

The economic climate has also put many enterprises off taking out business loans, especially while the national cash rate remains at 4.25 per cent.

A new business conditions index published by National Australia Bank (NAB) showed that corporate activity was measured at three points, which was up from two points in the fourth quarter of 2011.

Despite the slight upturn, NAB's chief economist Alan Oster said the economy was "going sideways" and the gap between mining companies and firms in other sectors is still worryingly large.

"The divide between the stronger mining and serviced-based sectors and the weaker consumer and trade-dependent sectors remained a marked feature of the economy in early 2012," he remarked.

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