Continuing demand for agricultural products, seasonal conditions and slowing operating cost increases are bringing tentative signs of improvement for Australian agribusinesses, according to the Westpac and Charles Sturt University Agribusiness Index.
For the September 2008 quarter, Queensland, Tasmania and Western Australia have all reported positive results.
And all states, except Victoria, have reported an improvement from the June quarter.
The Westpac and CSU Agribusiness Index is a nationwide survey of 1200 businesses in the agriculture sector conducted every quarter, with results available for each state and 48 divisions across regional Australia.
The most recent survey results show the national Economic Performance Index (EPI) lifted 5 basis points, from -0.07 in June to -0.02.
The September result was also a significant improvement on 12 months ago, when the EPI recorded -0.12.
The EPI is based on the average of results for business performance, employment and investment indicators.
Queensland and Western Australia saw big improvements in their EPIs, moving into positive territory.
Western Australia increased from 0.00 to +0.08 and Queensland lifted from -0.07 to +0.06.
Tasmania saw a significant turnaround, from -0.08 to +0.10.
EPI for New South Wales lifted three basis points from -0.13 in June to -0.10 and from -0.07 to -0.04 in South Australia, while for Victoria the Index fell from 0.01 in June to -0.04 in September.
"Final demand for agricultural products had the most significant impact on positive economic performance for Australian agribusinesses surveyed in the September quarter," Westpac's chief executive for agribusiness banking Graham Jennings said.
"As we have seen in Western Australia and Queensland, improved rainfall would provide a further boost in the rest of Australia.
"Of the agribusinesses that reported seeking finance, 81pc reported having no trouble obtaining finance in the past 12 months.
"This demonstrates the support and confidence we have in the future of Australian agribusiness."
Westpac and CSU Agribusiness Index survey co-ordinator and CEO of CSU's Western Research Institute, Tom Murphy, said business confidence factors, separately recorded in the survey, have also improved this quarter.
"Capital expenditure improved across Australia in the September quarter and was better than expected in most states, with the exception of NSW," Mr Murphy said.
"While operating costs for agribusinesses continued to increase in the September quarter, the rate of increase slowed from 0.74 in June to 0.63.
"With fuel/freight and fertilizer/chemicals both cited as the major contributors to the rising costs, it is no surprise that the primary producer sector is reporting the fastest rise in operating costs, with profitability being hurt as a result.
"Both the upstream and downstream sectors (supporting primary production) reported better than satisfactory profitability in the September quarter."
Nationally, 63pc of businesses surveyed felt confident about their business over the next 12 months, an increase from 60pc for the same period last year.
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