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Economic Update13th November 2009 The National Australia Bank Monthly Business Survey for October 2009 found that business confidence edged higher in October increasing by two points to +16 points, while business conditions rose nine points to +12 index points. Business conditions are currently at the highest level in 21 months. Approximately 350 small to large sized companies were surveyed in respect to their views on trading, profits and employment. The significant jump in business conditions narrows the gap between business confidence levels and actual business trading conditions. Most parts of the conditions index improved strongly, with profits up nine points to 13, trading up seven points to 15, and employment up eight points from negative territory to seven points, the best result since April 2008. The only category that fell was forward orders which dropped from seven in September to three in October. In contrast, consumer confidence fell for the first time in five months in October. The Westpac-Melbourne Institute index of consumer sentiment fell by 2.5% in November, following the decision by the Reserve Bank of Australia (RBA) to raise rates for the first time in 19 months in October. According to Westpac's Chief economist Bill Evans, the fall in consumer sentiment is modest "given that this fall comes after a second consecutive increase in the RBA's overnight cash rate and associated increases in variable mortgage rates". Consumer sentiment is still 38.3% higher than a year ago, and with the index remaining above 100 at 118.3 points, it indicates that there are still more optimists than pessimists. National Australia Bank Business Confidence and Conditions Survey
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