BUSINESS CONFIDENCE GROWS

Written on the 7 January 2014

BUSINESS CONFIDENCE GROWS

HIGH New Year business expectations could put pressure on Australia's low interest rates as confident traders consider raising prices in the new year, says Dun & Bradstreet economic advisor Stephen Koukoulas.

The latest Dun & Bradstreet Business Expectations Survey shows two out of three Australian business owners (68 per cent) are more optimistic about growth this year compared to 2013 and as a result, first quarter expectations for sales, profits, selling prices, investment and employment to their highest levels in 12 months.

D&B's sales index has jumped to 27.5 points, its highest point in 12 months, while the profits index has reached 25 points, its highest level since the first quarter of 2011.

This confidence could have potential to influence inflation, as 24 per cent of businesses are planning to raise the prices of their products and services during the first quarter of the year.

"If there is one cloud on the horizon, it is the expected lift in selling prices. A stronger economy is no doubt allowing firms to move their prices higher, but we are also seeing the impact on inflation from the recent weakness of the Australian dollar," says Koukoulas.

"This is likely to cause the Reserve Bank some concern, and is a fundamental factor why we are likely to see a series of interest rate rises during 2014."

A significant number of businesses are also expected to access new finance during Q1, with 18 per cent of respondents signaling their intention to go down this path - the survey's highest response since Q4 2011.

Capital investment and employment intentions have recovered from negative territory during the previous quarter and moved above 10-year averages.

The boost in finance plans has translated into a similar boost in capital expenditure expectations; 13 per cent of businesses indicated plans to increase capital expenditure, compared to the five per cent who will decrease.

Hiring plans have also strengthened, with 15 per cent of businesses intending to take on more staff while seven per cent plan to reduce their employment levels. The response has taken D&B's employment index to a three-year high of 8.8 points.

Danielle Woods, director of corporate affairs at Dun & Bradstreet, says the figures support the theory the economy is finding its feet.

"With companies looking ahead with optimism, forecasting strong sales and profits, and most recently showing a willingness and capacity to borrow money to grow their operations, the signs are positive for the New Year," she says.

"In particular, the increases in hiring and capital investment intentions indicate that businesses are preparing for a year of stronger growth and business activity.


Latest News

BELLAMY'S FINDS EXPORTING BABY FORMULA INTO CHINA IS NO CHILD'S PLAY

BELLAMY'S (ASX: BAL) shares have suffered a 40 per cent drop in value today after the company hit a regulatory...

BRISBANE WATCH BRAND ADINA AIMS FOR ICONIC

ADINA watches is at a turning point in its history, 45 years after being founded by Robert 'Bob' Menzies i...

WHY YOU SHOULD CARE FOR YOUR BODY AS MUCH AS YOUR BUSINESS

ENTREPRENEURSHIP is a busy business. It can be all-consuming, but it is important not to neglect your health Y...

BULLETS BACK IN THE BUSINESS COMMUNITY

ALTHOUGH new to the current south-east Queensland sporting landscape, the Brisbane Bullets have a rich basketball ...

Related News

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

BIG W CEO QUITS AFTER 11 MONTHS

SALLY MacDonald has resigned as chief executive of BIG W ending her tenure at the helm of the struggling discount ...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter