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EMPLOYERS are optimistic about job prospects, with twice as many businesses planning to hire new staff in 2014 compared to the end of this year, according to credit information agency Dun & Bradstreet (D&B).
The Business Expectations Survey has shown economic confidence, despite the International Monetary Fund’s prediction that Australia’s unemployment rate will increase to six per cent next year.
Ten per cent of businesses intend to take on staff in the New Year, compared to just four per cent in the previous quarter.
The survey has lifted D&B’s employment index to 5.1 points, the highest level since June 2012.
Danielle Woods, director of corporate affairs, says these figures highlight an improvement in business sentiment.
“While other business projections have been strengthening across the past couple of quarters, the employment expectations index had been continuing a steady downward trend.
“This turnaround, especially given the recent lift in the official jobless rate, provides hope that forecasts for unemployment beyond the six per cent mark may be over-estimations and that Australian businesses are in reasonable shape,” Woods says.
"Given employment activity is essential to consumer spending and an indicator that the corporate sector is healthy and willing to invest, then a sustained pick-up in this index across the coming months would be significant for the economy.”
Increased sales support plans to employ more staff, with 33 per cent of businesses expecting higher profits – up from 28 per cent in the last survey.
Significantly, 70 per cent of respondents have a positive growth outlook for next year, with 16 per cent planning to apply for financing to fund expansion.
Economic adviser Stephen Koukoulas says the business sector is gearing for a major upswing next quarter.
“Not only are firms optimistic about expected sales, profits and selling prices, but there is a clear uptrend now evident in expected capital expenditure and unemployment.
“The current dynamics in the Business Expectations Survey suggests GDP growth will exceed three per cent in 2014,” Koukoulas says.
“There is little prospect for further interest rate cuts with expected selling prices on the rise.
“Indeed if the upward momentum in business conditions continues with similar momentum in the months ahead, the market will be correct to price in interest rate increases during 2014.”
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