Consumer sentiment in Australia improved and went up 8.1 percent in September, according to a survey conducted by the Melbourne Institute and Westpac Bank.

The consumer sentiment index rose to 96.9 points, in seasonally adjusted terms, from 89.6 points, compilers Westpac and the Melbourne Institute said in a joint statement.

"This is a surprisingly strong result," said Bill Evans, chief economist at Westpac.

Mr Evans noted that this could be due to the strong recovery in economic growth in the June quarter and moderating interest rate expectations were behind the surprise increase.

In annual terms, the consumer sentiment index fell 14.4 per cent.

The rebound of consumer confidence is a stark reverse of business confidence, which according to a separate survey of the National Australia Bank has

The strong month-on-month bounce in consumer confidence was in stark contrast to a National Australia Bank survey of business confidence released yesterday.

Australian business confidence further staggered the most in August skidding to the lowest levels since April 2009, according a survey done by National Australia Bank.

The lingering fears of a contagion brought about by the debt crisis in Europe diminished business confidence even further to minus 8 in August from 2 in July last month, according to the latest survey prepared by the NAB.

The business confidence index, which slid to minus 3 from minus 1 the preceding month, is a gauge whether businesses hire, and if sales and profit targets were hit or missed.

The confidence index slumped to minus 8 in August from 2 in July, according to a National Australia Bank Ltd. (NAB) survey of more than 500 companies from Aug. 24-30 that was released in Sydney on Tuesday.

Monthly employment growth in Australia averaged 2,800 from January through August this year, less than a 10th of the average of 30,500 job gains in the first eight months of 2010. Australia's currency and benchmark stock index dropped last month and the MSCI World (MXWO) Index of equities sank 7.3 percent as concern increased that the Greek fiscal crisis would drag down other euro-area economies, Bloomberg said in a related report.