Politicians warned over business optimism

Political uncertainty has been blamed for fewer Australian businesses feeling upbeat about their future.

The latest Australian Chamber of Commerce and Industry-Westpac survey has found about a fifth of firms believe the general business situation will improve in the next six months, down from 37 per cent in June.

The decline should serve as a warning to Australia's parliament, the business chamber's chief executive James Pearson says.

"Australian business is not immune to from the corrosive effects of political uncertainty," he told reporters on Tuesday.

But the new survey is far from being all doom and gloom, with the outlook for manufacturers remaining positive.

The survey's composite index, which paints a picture of strength in manufacturing, rose to 66.5 in September from 64.1 in June.

That reading is well above average, Westpac senior economist Andrew Hanlan said, and reflects growing investment in state infrastructure projects and private commercial buildings.

Such projects have boosted the number of orders manufacturers have been receiving and their output, along with employment.

A relatively low Australian dollar has also proven helpful to exporters, Mr Hanlan said.

"Manufacturing is on the right side of the growth story," he told reporters.

Looking forward, the expected composite is positive but fell from 66.7 in June to 61.1 in September, with Mr Hanlan believing the drought may be weighing on some manufacturer's minds.

About a fifth (21 per cent) of firms plan to spend more on equipment over the coming year.

Mr Pearson said energy policy is a key area where the federal government should seek to improve certainty, after Scott Morrison declared its National Energy Guarantee policy was dead.

That will help improve Australia's competitiveness in the global market, which has become particularly important as the threat of a trade war between the United States and China looms.

"We need to make sure we have our house in order," Mr Pearson said.

Though only 22 per cent of firms anticipate an improvement in the business situation in the coming six months, 89 per cent expect it will improve or remain unchanged.