STRONG SALES BOOST BUSINESS CONFIDENCE

Written on the 5 February 2014

STRONG SALES BOOST BUSINESS CONFIDENCE

 SALES activity is expected to reach a ten year high, with 47 per cent of businesses positive about trade according to research from Dun & Bradstreet.

The Business Expectations Survey shows the sales expectations index has risen for a third consecutive quarter to 37.5 points, the highest level since 2003.

D&B chief Gareth Jones says the lower Australian dollar, record low interest rates and booming Christmas period contributed to the boost.

“These recent findings consolidate a broad pick-up in the business outlook that was first observed in the final quarter of last year with more positive expectations for sales, profits, employment and investment,” he says.

“Of equally positive note, firms are reporting fewer obstacles to growth this year and revealing a greater willingness to start accessing credit to expand their operations.”

The finance, real estate and insurance sector is especially confident, jumping to 58 per cent compared to 18 per cent this time last year
.
D&B economic adviser Stephen Koukalas says rising selling prices and unemployment could potentially curb future activity.

“The upswing in the economy continues to unfold, although the only moderate levels for expected employment and capital expenditure suggest a fully-fledged upswing may still be a few months away.

“It appears that inflation pressures are building rapidly, with expected selling prices surging to a five-year high.

“The economy is clearly responding to an easy monetary policy and the lower Australian dollar – perhaps too well, and it would be no surprise to see it start hiking interest rates in the months ahead.”


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