CAPITAL INVESTMENT ON THE RISE AMID SALES SLOWDOWN

Written on the 5 January 2016

CAPITAL INVESTMENT ON THE RISE AMID SALES SLOWDOWN

AUSTRALIAN businesses will shift their focus to capital investment in a bid to tackle lower sales expectations in the first quarter of 2016, according to Dun & Bradstreet.

The latest Business Expectations Survey forecasts strong investor sentiment with 23.1 per cent of businesses planning to increase expenditure.

D&B head of group development Adam Siddique says the figures are promising, with the Capital Investment Index up to 12.6 points compared to 11.9 points in the December quarter last year.

"We are finally seeing some positive movement in the capital investment space, which is encouraging and something we will track for further signs of improvement in the short-term," Siddique says.

"As flagged in last month's survey, sustained business investment across all sectors is a key driver of future economic growth."

He says employment opportunities should increase alongside investment as business activity ramps up.

Meanwhile, the Business Expectations Index has fallen to 18.9 points in the first quarter, down 2.9 points since last year. It continues to track higher than the 10-year average of 6.8 points.

Businesses in the transport, communications and utilities industry and the finance, insurance and real estate industry anticipate a lift in sales and profits during the start of the year.

Construction demonstrated the lowest expectations for the March quarter, with 35 per cent of businesses saying they are less optimistic about business growth in 2016.

D&B economic advisor Stephen Koukoulas says the overall tone of the business sector has dipped since the change in Prime Minister in September.

"The only positive component of the Business Expectations Survey is for capital expenditure, which has edged higher, helped it appears, by low interest rates and a more positive outlook for the non-mining sector," Koukoulas says.

"More than offsetting this positive news are falls in expected sales, profits and employment.

"The big picture view of the economy as 2016 kicks off is a continuation of the below-trend pace of growth.

"The economy is not doing poorly, but nor has it had the breadth of expansion that is required for the business sector to have confidence and a sustained lift in sales, profits and employment."

 


Latest News

THE STAR'S STUNNING ANSWER TO CROWN'S BARANGAROO

THE Star Entertainment Group (ASX:SGR), not to be outdone by James Packer's Barangaroo development across the ...

BRISBANE COAL TERMINAL REOPENS AFTER SHIPLOADER REPAIR

COAL loading has recommenced at New Hope's (ASX: NHC) Brisbane terminal today after repairs to its ship loader, w...

SUPERYACHTS OFFER UNTAPPED POTENTIAL AT COMMONWEALTH GAMES

SUPERYACHT Australia has devised a strategy to attract more superyachts to Queensland and capitalise on revenue op...

GDP FIGURES A 'WAKEUP CALL' FOR PARLIAMENT

THE GDP figures are an end-of-year wakeup call for Parliament about what lies ahead for the country, according to ...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

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...

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