Australian businesses expect a strong December quarter, with Christmas trading to bring the growth many businesses have been waiting for, according to the latest Dun and Bradstreet Business Expectations Survey.
Business expectations for growth in sales, profits, employment, inventories, capital and investment and selling prices during the December quarter 2010 are solid, with certain indices at the highest level in six and seven years.
The sales expectations index has surged 16 points to 34. Forty nine percent of firms expect an increase in sales in the December quarter 2010, while 15 percent anticipate a decrease. The confidence of retailers has climbed significantly, with the retail sales index rising 28 points to 37. The sales index for durables manufacturers’ also rose substantially, climbing 26 points to 38.
Dun & Bradstreet’s CEO Christine Christian expects the Christmas trading period be the catalyst Australia needs to drive a significant increase in sales and economic growth.
“The confidence of Australian firms has improved substantially over the past 18 months,” said Ms Christian.
“Executives are now expecting to deliver solid sales and profits growth in the December quarter – they are also anticipating a need to take on new staff and displaying an appetite to invest in their operations. All of these factors bode well for our economy and indicate we will continue to deliver healthy growth in the second half of 2010.
Dr Duncan Ironmonger, believes businesses expect complete 2010 on a positive note, provided that interest rates remain unchanged
“All indexes for the December quarter are well in advance of the September quarter,” said Dr Ironmonger.
“In addition, the trend rate of new dwelling approvals in August continued to decline at an annual rate of almost 30 percent. Consequently, the Reserve Bank may decide to leave cash rates unchanged for another month at its meeting this week.”
However with economists tipping a 25 basis points increase in interest rate at today’s RBA board meeting, this Christmas may not be a buoyant one for Australian businesses.