A recent National Australia Bank business survey found business confidence had risen sharply in September from 4 to 12. Consumer sentiment declined 2.1 per cent but remains above average at 108.3 since the second quarter, following gains in August and September. This could see an increase in consumer spending, Mr Bloxham said.

Mr Bloxham attributed these increases to the recent change in government, rising house prices, a lower Australian dollar, low interest rates and the stabilisation of Asia.

“Together, these provide an early sign that the much needed rebalancing of local growth may be starting to extend beyond a lift in the housing market,” said Mr Bloxham. He said this was important in the face of the slowing mining boom.

Australian purchasing manager surveys for the manufacturing, construction and services sectors also increased in September, with the manufacturing PMI jumping to 51.7, the construction PCI rising to 47.6 and the services PSI rising to 47.1. It was the first time the manufacturing PMI rose above its break-even level of 50 since June 2011, while construction reached its highest level since May 2010. 

Mr Bloxhom said the improved conditions experienced by the manufacturing, construction and services sectors were likely to be the result of greater political certainty. He said manufacturing would have likely benefited from the fall in the Australian dollar from US$1.05 in April to the low to mid-90 cents in recent months. HSBC believes the construction and services sectors were supported by the rise in the housing market.  

“The lift in business confidence may also see firms more willing to increase their hiring and investment, particularly given the reduction in political uncertainty due to last month's change of government,” said Mr Bloxham.