Australian businesses will keep cutting their spending this year, with expectations for capital investment, employment and new credit set to fall further.
The deteriorating outlook for the September quarter suggests that despite pockets of optimism, including low interest rates and recovering consumer confidence, a tough trading environment and tight cash flow are restricting business spending.
Following a weak Q2 outlook, Dun & Bradstreet’s National Business Expectations Survey shows the capital investment index for Q3 has fallen further, from five to negative three, its lowest point in more than three years. In addition, actual investment for the March quarter dropped to negative six, its lowest level since early 2009 when businesses were taking cover from the global financial crisis.
The manufacturing sector in particular has pulled back investment plans, with no businesses from the industry indicating they will increase capital spending. These findings come at a time when manufacturers continue to be impacted by a high Australian dollar and operational costs, with the Australian Industry Group Australian Performance of Manufacturing Index for March dropping to its lowest point since May 2009.
To read the full story, please click on the link: DB Business Expectations Survey – Sep quarter 2013 – prelim
