Business confidence and profit expectations are up following the Coalition victory.
Business owners seem to be taking a positive view of the election result, with surveys showing a business confidence boost following the Coalition victory.
Dun & Bradstreet’s latest National Business Expectations Survey found 65 per cent of businesses reported higher confidence levels following the change in government.
More than a quarter of businesses now expect to increase their profits over the next three months, lifting the survey’s profits expectation index to 21.1 points, up from 13.2 points in the previous quarter.
Danielle Woods, director of corporate affairs at Dun & Bradstreet, says the results point to a “genuine upward trend” after a low point in late 2011.
“Despite facing tough trading conditions throughout most of the year, businesses are indicating that they see some light at the end of the tunnel,” she says.
“Profit expectations are closely linked to optimism, so we often see a lift in the run-up to Christmas, however there’s undoubtedly been a boost from last month’s change of government.”
Results are not all cheery, however, with more than a quarter of businesses identifying cash flow as a barrier to growth in the coming months, and 22 per cent predicting that fuel costs will be their biggest obstacle.
Added to this, over 40 per cent of businesses have had customers or suppliers become insolvent, or otherwise unable to pay them, in 2013, and 11 per cent are concerned about potential scams or fraud.
Andrew Waldrom, NAB's executive general manager of growth partnerships, says the level of surety brought on by a strong election result is a positive for growth generation.
“In terms of policies and so on, it’s too early [to tell], but having a bit of confidence in the market is great. And confidence builds confidence, so we hope that we continue to see that.
"It’s been a pretty strong start to spring in terms of clearance rates around the country. And whilst that’s not the same in every capital city, particularly in the major cities it’s certainly showing that that confidence is there, buyers are out, and that’s a good thing in the short-term for us.”
Outlook for the December quarter 2013
- The employment expectations index has increased slightly, but remains in negative territory at 1.1 points.
- The sales index has risen to 7.9 points, up from4.9 points in the previous quarter.
- Profit expectations for the next three months have lifted, with the index increasing from 13.2 points to 21.1.
- Plans for capital investment have increased slightly compared to the previous quarter, easing up to an index of 0.4 points from 1.5.
- The selling prices index has risen for the second consecutive quarter, up to 10.2 points from 9.4 in the quarter previous
Issues expected to influence operations in the December quarter 2013
- 65 per cent of businesses have more confidence about future business conditions following the change of government at last month’s election.
- Cash flow is identified as the biggest barrier to growth (26 per cent), followed by fuel costs (22 per cent).
- 41 per cent of businesses have had customers or suppliers that became insolvent, or were otherwise unable to pay them, during 2013.
- 11 per cent of businesses hold concerns about the potential for online scams or fraud to impact their operations.
- 58 per cent of businesses expect no impact from the level of the Australian dollar, while 16 per cent expect a small positive impact and 18 per cent a significant positive impact.
- 62 per cent of businesses do not intend to seek finance or new credit in the quarter ahead to help their business grow, while eight per cent will.
What expectations do you have for the December quarter? How will a Coalition government affect your business and the economy? Share your thoughts below.
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