CONFIDENCE RISES TO DECADE HIGH

Written on the 2 September 2014

CONFIDENCE RISES TO DECADE HIGH BUSINESSES are feeling more confident about profits than they have for the past decade according to the latest Dun & Bradstreet Business Expectations Survey.

Overall, the profit expectations index has lifted to 29.1 points, up from 19.9 in the last quarter and 21.1 last year.

Based on 10-year history, the index is edging its decade high of 29.7 points.

History also shows actual profits usually follow expectations, with intermittent periods where they surpass.

Other great expectations included a lift in the employment expectations index and sales expectations index from the previous quarter.

Plans for capital investment have continued to life for the fifth consecutive quarter, while selling prices expectations have fallen.

CEO of Dun & Bradstreet – Australia and New Zealand, Gareth Jones, says the latest survey highlights a resilience in the business sector’s outlook but shouldn’t be used to generalise feelings across industries.

“Over the past 12 months, the majority of businesses have been reporting greater levels of optimism about the current business environment compared to 2013,” says Jones.

“This view has now been carried through to the end of 2014, with 68 per cent of businesses more confident about growing their operations in the fourth quarter, while sales and profits expectations have also jumped.

“Despite the general improvement, however, it is clear that the economy is delivering a mixed performance and that some sectors expect further headwinds.”

The retail; wholesale; services; finance, insurance and real estate sectors have lifted their profit expectations for the fourth quarter.

Manufacturing; construction; transportation, communications and utilities have conversely revised their expectations downwards from the prior corresponding period.

Stephen Koukoulas, economic advisor to Dun & Bradstreet, says this level of confidence is typically only coupled with strong economic conditions.

He also says lower selling prices would mean good news for those hoping for a hold on interest rates.

“Not only are expected sales at an 11-year high; a sign of buoyant activity, but expected profits are at a level well above the long run average,” says Koukoulas.

“In the past, firms have only held this level of optimism when the underlying economic conditions were strong.

“D&B’s data suggest that the economy is poised to run at – or even above – trend levels in the second half of 2014, with expected employment and capital expenditure also well above the long run average.

“Encouragingly for the economy’s progress, expected selling prices continue to moderate, which indicates that inflation pressures are very well contained.

“A low inflation climate will be vital for the Reserve Bank of Australia to keep its interest rate settings on hold.”

Dun & Bradstreet based the survey on 800 responses obtained from a sample of executives during July and August this year.


Latest News

HOW TO LEAD A BETTER BUSINESS WITH YOUR PARTNER

PEOPLE say that starting your own business is one of the greatest challenges you can face. Edward and Rebecca Plan...

CORPORATE TRAVEL MANAGEMENT NOTCHES UP 23 YEARS OF CONSECUTIVE GROWTH

CORPORATE Travel Management (ASX: CTD) has reported its strongest ever full-year results, with a net profit increa...

REPORTING SEASON WRAP: TUESDAY HIGHLIGHTS

* BHP Billiton (ASX: BHP) reported full year net profit of $7.42 billion compared to a $8 billion loss in the previou...

GREENCROSS PLANS MORE IN STORE VET CLINICS ON THE BACK OF A 21.5 PER CENT PROFIT RISE

VETERINARY services provider Greencross Limited (ASX: GXL) has reported an increase in profit of 21.5 per cent to ...

Related News

DARK DAYS AHEAD FOR AUSTRALIAN RETAIL AS REPORT FORECASTS MAJOR INDUSTRY ROUT

ALMOST 1,600 retail businesses are at risk of imminent collapse, including 21 major retailers with turnovers of more ...

REPORTING SEASON WRAP: MONDAY HIGHLIGHTS

* FORTESCUE Metals (ASX: FMG) reported net profit after tax (NPAT) of $2.64 billion for the year to June 30, up fr...

WESFARMERS BOOKS BUMPER PROFIT BUT SUPERMARKET WAR HITS COLES' BOTTOM LINE

SUPERMARKET giant Coles has posted its biggest slide in earnings since it was acquired by Wesfarmers (ASX: WES) 10 ye...

ANALYSTS PREDICT WHAT AUSSIE LIVING IS LIKELY TO BECOME IN THE NEXT CENTURY

AS THE Australian population continues to grow, analysts are predicting what the country is likely to look like wi...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter