Australian Risk Climate: Sales Projections Surge Despite Lingering Uncertainty

Expectations among Australian firms soared to levels not seen in almost 10 years, with over half of businesses anticipating an increase in sales during the December quarter.

According to the latest Dun & Bradstreet National Business Expectations Survey sales projections among local businesses jumped 29 points to the strongest position since the December quarter 2003. Fifty-four per cent of executives expect sales to increase, while 40 per cent anticipate growing profits over the Christmas period.

The survey revealed businesses also plan to replenish stock levels and increase staff numbers, with expectations for inventories rising 23 index points to be 20 points above the 10 year average. One in five employers also plans to grow staff numbers, well above the average over the last decade.

According to Dun & Bradstreet CEO, Gareth Jones, the dramatic improvement in executives’ outlook is a welcome change from recent pessimism, however lingering pressures such as the high dollar will likely weigh on business outlook. The buoyant short term outlook is in sharp contrast to recent uncertainty and bodes well for a strong December quarter driven by expectations of solid Christmas trading.” “This shift was particularly pronounced among retail firms, with sales projections leaping 43 points. This is particularly positive given some retail small businesses have indicated they can generate up to one-third of annual turnover during the December quarter,” Mr Jones said.

However, over a quarter (29%) of retailers expect the high Australian dollar to have a significant negative impact on operations, up from 14 per cent in June. Likewise, 46 per cent of retailers expect online competition to have a large adverse affect on business performance — up from 21 per cent since June.