SOLID INCREASE IN BUSINESS SPENDING AND INVESTMENT CONTINUES
4 March 2014,
BUSINESSES are twice as likely to increase capital investment spending than cut costs in the next few months, according to a Dun and Bradstreet study.
The latest Business Expectations Survey shows 19 per cent of businesses will increase spending in the second quarter, following a steady rise in spending over the last year.
Almost 19 per cent of businesses intend to access finance or credit to cover expansion, in comparison to just nine per cent last year.
Chief executive officer Gareth Jones says the results are fitting after sales expectations in construction, transport and real estate, hit a ten year high.
“After reining in their expenses through much of last year, businesses are showing a greater appetite for investment, which bodes well for the general performance of the economy this year.
“While recent high profile corporate announcements on jobs and operations in Australia have highlighted the challenges that remain for a number of industries, we are still seeing year-on-year improvements in the general business outlook,” he says.
The survey found that 48 per cent of businesses are optimistic about sales revenue this quarter, with 11 per cent expecting reduced trade.
The biggest challenges to growth were expected to be a slow demand for products and competitors selling online.
Economic advisor Stephen Koukoulas says the figures point to a trend pace of economic growth.
“All up, the business sector is moving into the middle of 2014 in sound shape with strong sales, improving capital expenditure plans and a steady view on profits and employment,” he says.