The Christmas trading period looks set to provide the stimulus Australian businesses need to generate strong growth
October 5, 2010
The Christmas trading period looks set to provide the stimulus Australian businesses need to generate strong growth, according to the latest Dun & Bradstreet Business Expectations Survey.
Executives’ expectations for growth in sales, profits, employment, inventories, capital and investment and selling prices during the December quarter 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, while 15 percent anticipate a decrease.
Strong sales expectations are also flowing through to the profits, inventories and employment indices.
The profits index has climbed to its highest level in more than six years, with a 14 percentage point rise since the September quarter taking the index to 26.
Four in ten firms (38 percent) expect profits will increase during the December quarter, while 12 percent anticipate a decrease.
The inventories index is currently at the highest level in seven years, with a rise of six points since the previous quarter taking the net index to 13.
Employment expectations have climbed three points on the September quarter, taking the net index to eight, while capital investment expectations have risen four points to an index of 17.
CATALYST FOR GROWTH
D&B’s CEO Christine Christian says the Christmas trading period could 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,” Christian says.
“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,” she says.
“All of these factors bode well for our economy and indicate we will continue to deliver healthy growth in the second half of 2010.”
However, Christian warns a reasonable level of growth must be maintained to ensure a sustained recovery.
“Although solid December quarter results will undoubtedly assist GDP figures for 2010, growth in these key areas must continue into the New Year if we are to prove resilient to the economic factors impacting other developed nations,” she adds.
D&B Australasia conducted the latest Business Expectations Survey last month.
Each quarter 1,200 business owners and senior executives representing major industry sectors across Australia are asked if they expect increases, decreases or no changes in their upcoming quarterly sales, profits, employment, capital investment, inventories and selling prices.