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Australian Risk Climate: SALES EXPECTATIONS HIT 10-YEAR HIGH

The outlook for stronger sales activity has surged to a 10-year high, with 47 per cent of businesses expecting increased trade during the June quarter as confidence builds about the year ahead.

D&B logo-8Findings from Dun & Bradstreet’s latest Business Expectations Survey show the sales expectations index has risen for a third consecutive quarter to hit 37.5 points for Q2 2014, its highest level since Q4 2003.

According to D&B, business confidence has been building since the final quarter of 2013, with a lower Australian dollar, record-low interest rates and healthy Christmas trade feeding through to a stronger 2014 outlook. Most recently, the Business Expectations Survey has found that 70 per cent of businesses are more optimistic about growth this year compared to 2013. In addition, 38 per cent expect higher profits, 20 per cent intend to borrow to expand their business, and 32 per cent do not see any major barrier to their growth.

Q2 Bus expectations 2014

Although a lower currency and borrowing costs are supporting domestic consumer spending and have eased operating conditions for many businesses, D&B’s survey indicates that inflationary pressures are building. The selling prices index for the June quarter has jumped to 27.9 points, its highest level since Q3 2009, as 35 per cent of businesses indicate they will raise prices compared to seven per cent which plan to discount. This outlook follows recent official inflation numbers showing a 0.8 per cent jump in the consumer price index for the December quarter.

GarethJones“The steep lift in sales expectations is a confident statement from the business sector, which is viewing this year with healthy levels of optimism,” said Gareth Jones, CEO of Dun & Bradstreet.

“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.

“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.  “Among the survey’s findings, however, the continued rise in the selling price index and forecasts of higher unemployment this year have the potential to curb future sales activity,” Mr Jones added.

With the exception of the transport, communications and utilities sector, an improved sales outlook has been reported across all industries surveyed. The finance, insurance and real estate sector is particularly positive, with 58 per cent expecting increased sales in Q2 2014, compared to 18 per cent at the same time last year.

To read the full report click on this link: DB Business Expectations Survey – Q2 2014 prelim

For further details contact: 
Josh Maher | Manager, Communications & Corporate Affairs
Dun & Bradstreet Australia | Level 6, 479 St Kilda Road, Melbourne VIC 3004
t +61 3 9828 3644  |  m +61 498 142 567  |  e [email protected]  |  w www.dnb.com.au

Source:  D&B Australia

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