Australian business confidence back on track

According to a leading business expectations survey, Australian businesses are regaining confidence in the economy and are confident that their sales and profits will increase in the lead up to Christmas.

The latest Dun & Bradstreet National Business Expectations Survey has highlighted that Australian businesses are confident in the outlook for the December quarter 2009.

According to the findings, sales and profit expectations have risen significantly with 46 per cent of respondents expecting an increase in sales and 31 per cent expecting an increase in profits.

In addition to this, expectations for growth in inventories have reached the highest level in five years with 20 per cent of firms planning to increase stock while 12 per cent expect to decrease.

Christine Christian, CEO of Dun & Bradstreet, commented on the strong results and the prospects of Australia’s recovery leading to the peak Christmas period.

“We have seen a substantial improvement in executive expectations in recent months with key indexes such as inventories, capital investment, sales and profits all entering positive territory for the first time since June 2008 quarter,” she said.

“However it is important we remember that we are coming off a comparatively low base as firms are measuring their expectations against the December quarter of 2008 when Australia experienced negative growth.”

Christian further expanded on the time frame for recovery.

“Although Australia appears to be one of the only OECD countries to survive the crisis, with only one quarter of economic contraction, there are still some uncertainties about the speed with which Australia will return to sustained and significant growth,” she said.

“For business this presents new challenges. Successfully responding to those challenges requires a strategy similar to that which was critical for survival during the downturn. That strategy is an unwavering focus on the fundamentals of risk and cash flow management.”

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