The Australian business outlook for 2013 is mixed, with Australian executives indicating that sales, inventories, selling prices and employment will fall but investment and profits will rise.

Dun & Bradstreet’s latest National Business Expectations Survey reveals that sales expectations have fallen 12 points to an index of 21 however, the index remains that the second highest level in the last eight quarters. This follows September quarter results which reveal that 43 per cent of firms increased sales compared to the prior year.  The inventories index aligns closely with sales, as business executives indicate they will hold back on stock purchases given lower expectations for sales. The index has fallen five points but remains 16 points above the 10-year average index of three.

The selling prices index is down seven points to five, the lowest level since the survey began in 1988 and 24 points below the 10-year average of 29. This result is consistent with ongoing low inflation. At the same time, employment expectations have weakened, moving in line with other forward indicators of labour demand. The index has fallen two points to minus one and is now two points below the 10-year average index. If current trends continue, it is likely the unemployment rate will rise in the months ahead.

Conversely, the profits index has risen four points to an index of 24. It is now at the highest level in eight quarters and is 19 points above the 10-year average index. Capital investment expectations are also up. The index rose two points to 17 and now sits 12 points above the average index (five) of the last 10 years.

According to Gareth Jones, Dun & Bradstreet’s CEO, the outlook for the first quarter of the New Year is mixed, with expectations for some key indicators rising while others have fallen back.  “The encouraging aspects of the outlook are the rise in profit and capital investment expectations,” said Mr Jones.  “Lower interest rates are likely to be a key factor influencing capital investment expectations, while on the profits front, other input costs rather than stronger sales, are likely to be impacting expectations.   “On the downside, we’ve seen expectations for sales and employment fall however, expectations are comparatively buoyant, as they remain solid compared to ten year averages.”

To read the full story click on the links:  2012-12-04 Outlook for 2013 a mixed bag pdf

2012-12-04 DB Business Expectations Survey Charts – December 2012 pdf

Source:  D&B Australia