Dun & Bradstreet’s monthly Business Expectations Survey has reported the sales index as standing at 36.6 points, a leap above its10-year average of 13.06 points.
Of 400 business executives surveyed, 46 per cent said they expected increased sales activity in the fourth quarter of the year compared to nine per cent anticipating fewer sales, and the remaining share expecting no change.
The services sector is driving this confidence, with its sales index jumping to 52.5 points, up from 4.0 points in the previous corresponding period.
Gareth Jones, CEO of Dun & Bradstreet Australia and New Zealand, says the confidence sparked in late-2013 seems to have caught on.
The outlook is also said to put into refute some of the implications of the Federal Budget.
“These findings on December quarter expectations have continued the generally positive trend we’ve been seeing since the end of 2013,” says Jones.
“While there has been a recent pullback in the profits and capital investment indices, there’s a clear upward trend developing this year and all of the survey’s measures are above their 2013 level.
“The sales outlook is particularly solid through to the end of the year, providing encouragement for those businesses concerned that the Federal Budget had knocked the wind out of consumer confidence and spending.”
These expectations come in spite of actual sales activity for the June quarter having fallen from 11.9 points to 11.5 points.
Economic advisor to Dun & Bradstreet Stephen Koukoulas says the latest report on business expectations should signal employment, which showed promise in the latest survey, although no real rival to the sales index.
The employment expectations index lifted to 13.7 points up from 12.7 points in the previous quarter, and -1.1 points a year ago.
“Continued resilience in the outlook for employment suggests that the pace of job creation will move to a point where the unemployment rate edges lower over the next couple of quarters,” says Koukoulas.
He also drew on the selling prices index, which fell from 20.3 points to 18.4 points, and the softening of the capital investment index from 12.1 points to 10.5 points to reach conclusions about the economic landscape.
“The dip in expected selling prices indicates that the inflation rate probably peaked in the June quarter and will ease to the middle of the RBA’s two-to-three per cent target band.
“While expected capital expenditure and profits expectations are broadly flat, they remain well above the level of 2013 and fit with an overall picture of solid, if not spectacular, growth in the economy.”
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