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Businesses expecting increase in sales and profits in December quarter

Australian businesses are expecting to see a rise in both sales and profits during the December quarter, a new survey has found.Economic optimism

The latest Dun & Bradstreet Business Expectations Survey, conducted by credit reporting company Dun & Bradstreet, reveals that sales and profits expectations – two key indicators of business strength – have risen substantially since the previous quarter, demonstrating that business confidence is improving as year end approaches.

The sales index has made a substantial rise, climbing seven points to 25. Forty one percent of firms expect an increase in sales in the December quarter. The substantial rise in the overall sales index is flowing through to impact profits expectations, with this index rising 12 for the September quarter to 17, taking the index back to its highest level in five years. Almost 28 percent of firms expect an increase in profits.

There has been a significant turn around in the expectations of Australia’s executives since the previous quarter, according to Dun & Bradstreet’s CEO Christine Christian.

“Six key indicators of business strength tumbled during the previous quarter, with the sales indicator in particular taking a significant dive,” said Ms Christian.

“However, the latest survey shows a significant turn around in confidence and expectations as we head towards the December quarter.”

“The number of firms expecting to increase sales and profits is strong, which bodes well for the nation’s economic growth in the coming months.  However, Australian firms remain cautious on employment and capital investment, Ms Christian added.

The survey also found that employment expectations are down, with nine percent of firms planning to increase staff levels and six percent expecting to reduce employee numbers.

These results signal that there is still a way to go before we return to the overall levels of confidence and prosperity that existed prior to the onset of the Global Financial Crisis, says Ms Christian.

“But if executives take a long term approach to business management, which includes a strong focus on investment for the future, Australia should be well positioned to accelerate the pace of growth while many other developed nations continue to face economic stagnation,” Ms Christian added.

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Julia Clarke

Julia Clarke

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