Australian executives are confident of a strong finish to the 2010 financial year, with expectations at their highest level in seven years according to Dun & Bradstreet.
Australian executives are expecting a strong finish to the 2010 financial year, with sales expectations at their highest level in six years and profit expectations at their highest in five years, according to a recent survey.
The executive expectations survey, by Dun & Bradstreet has shown sales expectations are at their highest level in six years, rising five points to an index of 33 with profit expectations at their highest level in five years, increasing seven points to an index of 17.
The executives profit expectation index was 74 points higher than the June quarter last year.
Dun & Bradstreet chief executive officer Christine Christian concluded that the survey results are indicative that executives strongly believe 2010 to be a different beast to the previous financial year.
“There had clearly been a great deal of caution shown by Australian executives in the second half of last year, largely due to the wind down of the Government stimulus package,” Ms Christian said.
“However much of this caution seems to have dissipated over the past quarter.”
“The return in confidence in the majority of key indices such as sales, profits and employment and an improvement in long term indicators such as capital investment and inventory demonstrates that businesses believe that this improvement will not just be short term.” Ms Christian said
The survey also found expectations for inventory growth in the June quarter have hit their highest level in over five years.
“While these results are positive for the Australian economy they do signal an increase in competition for labour and raw materials pointing to potential capacity constraints in the economy,” Ms Christian said
Dun & Bradstreet economic consultant Duncan Ironmonger says the survey shows capital investment expectations are at their highest levels in almost seven years.
“However the latest ABS retail sales and building approvals statistics for February 2010 show negative movements in seasonally adjusted terms which must cause some concern to business executives,” Dr Ironmonger said.