The gloom and doom of the slowdown have been banished by another sharp improvement in business confidence.

Yesterday it was two key job indicators turning positive for the first time in 16 months, today it’s the National Australia Bank’s business confidence and conditions survey revealing a sharp rise from the already solid improvement in sentiment to the highest level in nearly six years.

The improvement, which has surprised on the upside, puts business confidence now ahead of the improvement in consumer sentiment and well ahead of still-rising business conditions. The last time confidence was this high was in October 2003 and the NAB says the improvement has put confidence well above the long term averages in its survey.

That could indicate an overshooting among many businesses relieved not to have had their balance sheets pummelled like those in the US, UK, Europe and Japan.

The survey results are stronger than they seem — the NAB pointed out that the fieldwork was done before the RBA left rates on hold on Tuesday of last week, and the release of the stronger-than-expected growth figures for the June quarter and 2008-09 the day after: “As such, the further significant improvement in business confidence is quite remarkable,” the bank said.

The surge has seen the NAB cut its unemployment peak forecast to 6.75% from 7.25% (which is now the new ANZ forecast). It joins the AMP in lowering its jobless peak prediction to well under 7%, indicating there’s only around 1% extra unemployed to be produced by this slowdown. Unemployment is expected to rise to 5.9% in August in when the ABS labour force statistics are released on Thursday.

And the NAB (which has already brought forward its first rate rise forecast to November) says the surge “further erodes the case for maintaining emergency lows in interest rates — notwithstanding a relatively flat outcome for growth expected in H2 2009.” That will be music to the ears of Malcolm Turnbull, Joe Hockey and The Greens.

The bank also says it sees positive growth for the current quarter, instead of a small fall, which now could happen in the last three months of the year.

The market will see this result was being “bullish”; for a rate rise: the Aussie dollar is now trading well above 85 US cents, around one year highs, and seems headed back to the 90 US cent mark because of the superior growth prospects in Australia compared to the US, Japan and Europe.