NAB's business survey for October found that sentiment among the some 350 respondents was at its gloomiest since just before last year's Federal election.

However, their view on trading conditions, based on sales and profits, is at its highest point for years, after the relevant index surged a record 12 points, to 13, between September and October.

The results confounded NAB's chief economist, Alan Oster, who noted that this was the first time since 2012 that confidence had dropped below conditions, suggesting "firms remain uncertain over near-term demand in their industry".

He said confidence levels varied markedly across different sectors, reflecting the contrasting impact of the lower Australian dollar on different operations.

"While the falling Australian dollar may have helped many sectors, it is probably also behind the large falls in the wholesale and transport/utilities sectors," he said.

A weaker exchange rate makes exports cheaper, and locally made goods more competitive with dearer imports.

Some local business people, however, are less equivocal about current conditions and confidence.

"Everyone knows business is down," said Tony McGrath, founder and chairman of haulage company McGrath Newcastle.

"To alleviate competition, I've got a warehouse so we can value add.

"We're not just moving product from A to B; we also pack the containers and store them for our customers.

"If you're in this business and just transporting it's much more difficult."

Tuesday's data, which coincided with further statistics confirming a slight cooling of house price growth, got a mixed reception.

The Australia dollar barely reacted, before ending local trade slightly down on Monday.

Economists were divided on what the survey was saying.

JP Morgan was among those who suggested the contradiction may reflect the fragile nature of the current pick-up.

"It appears that firms are viewing better conditions as temporary, or are at least reserving judgment on whether the improvement in outlook will transmit to their own bottom line," the investment bank said in a note.

"Amid these uncertainties, it will be important to see whether the recovery in conditions can be sustained into year-end."

HSBC, however, said the NAB survey results would be well-received by the Reserve Bank of Australia, whose focus is Australia's transition away from resources-related infrastructure activity to a broader-based economy.

"The RBA is likely to be heartened by these data, as the NAB survey is one of the central bank's preferred timely indicators of economic conditions," chief economist for Australia and New Zealand Paul Bloxham said.

"[Tuesday] brought further signs that Australia's great rebalancing act is under way.

He said he expected to the RBA to lift interest rates around mid-2015.

NAB said the jump in business conditions pointed to a strong start to the fourth quarter of calendar 2014, although growth would remain constrained by "weak terms of trade, soft labour market and signs of downturn in building cycle".

The survey found expectations that unemployment would peak at 6.5 per cent, compared with 6.2 per cent now, and that the RBA would not lift interest rates until the end of 2015.

Businesses reported that sales and profitability were much better in October, but employment lagged.