In the latest Dun and Bradstreet Business Expectations survey finds the confidence of Australia’s executives on the way up, with expectations for five of six key indicators of business strength rising significantly.
The latest Dun & Bradstreet Business Expectations Survey reveals solid expectations for growth in sales, profits, inventories, capital investment and selling prices during the December quarter however, firms remain subdued on hiring intentions.
The profits index has risen to its highest level in six years, with a ten percentage point climb since the September quarter taking the index to 22. One third of firms (34 percent) expect that profits will increase during the December quarter, while 12 percent anticipate a decrease. This substantial turn-around in confidence is remarkable, particularly following June quarter results which revealed that eighteen percent of firms recorded lower earnings than the prior year.
Retailers have experienced the most significant increase in expectations, rising 17 points to an index of 25. Conversely, non-durables manufacturers have the lowest profits expectations, with the net index at 17.
According to Dun & Bradstreet’s CEO Christine Christian, confidence is returning and the outlook for the back half of the year is promising.
“The turn around in the expectations of Australia’s executives since the previous quarter has been quite remarkable,” said Ms Christian.
“The latest survey shows that five key indicators of business strength have improved relatively significantly, with certain indexes rising to the highest level in six and seven years. The sales index is particularly strong and it is driving the increased level of expectations in profits, inventories and capital investment.
“We have also seen some quite substantial improvements in the actual index since the depths of the crisis, with the improvements experienced during the June quarter playing into confidence levels as we head towards the end of the year.
“The one area where firms remain cautious is employment. However, the intended level of hiring activity for the December quarter is still positive.”
