After reporting a strong end to the year the business sector has trimmed its short-term outlook for sales and profits, while indicating plans to increase employment.
According to Dun & Bradstreet’s Business Expectations Survey, the sales expectations index for Q2 2015 has eased to 33.6 points, down from the previous quarter’s 10-year high of 38.7 points and flat compared to the same time last year. The correction comes as a fewer businesses expect increased sales in the next three months and slightly more anticipate reduced activity.
Additionally, the survey reveals a moderating outlook on earnings for the second quarter, with the profit expectations index dropping to 20.4 points, down from 25.9 points last quarter and 20.7 points a year earlier. Thirty-three per cent of businesses expect higher profits in the quarter ahead, while 13 per cent anticipate lower earnings and the majority flat results.
Despite the softer outlook for sales and earnings, employment expectations have lifted for a seventh consecutive quarter, indicating that a longer-term optimism exists among business owners. Thirty per cent of firms expect to hire during Q2 2015 compared to seven per cent that will reduce their staff numbers, lifting the employment expectations index to 23.0 points, up from 16.1 points last quarter and 9.2 points in 2014.
The outlook on employment is the most positive for 10 years and follows data from the ABS showing that the unemployment rate fell to 6.1 per cent, with more than 37,000 jobs added in December.
To download the full report click on this link: DB Business Expectations Survey – Q2 2015 – prelim
Source: Dun & Bradstreet Australia
