Sales expectations for the fourth quarter of 2015 reported in Dun & Bradstreet’s Business Expectations Survey rebounded strongly to reach their highest level since 2003, sending a positive signal to the broader retail trade, including grocery and convenience.
In marked contrast to the preceding period, the latest Business Expectations Survey reveals the Sales Expectations Index for the fourth quarter surged to 40.8 points, up from 28.6 points last quarter and the highest level recorded since the fourth quarter of 2003. Some 48% of companies surveyed expect to see an increase in sales in the fourth quarter of 2015.
The combination of competitive pricing, a lower Australian dollar, favourable borrowing costs and government measures targeting small to medium-sized businesses appears to have offset concerns surrounding weak demand for goods and services and a lack of consumer confidence.
According to the survey, 36% of businesses increased sales during the second quarter, while 19% saw a drop in sales.
“The strong survey results suggest businesses have a brighter short-term outlook than we’ve seen in recent months, which is a positive sign for increased economic activity during the second half of the year,” said Adam Siddique, head of corporate affairs at Dun & Bradstreet.
The spike in the Sales Expectations Index was not uniformly reflected across all sectors. The Business Expectations Survey revealed sales expectations in the wholesale sector eased slightly lower to 33.4 points, down from 34.2 in the prior quarter and comfortably below the 41.5 points recorded for the same period in 2014.
While the outlook for capital investment remained flat, the retail sector bucked the broader trend with 19.8% of companies forecasting increased capital investment, compared with 18.4% last quarter, significantly up on 10.7% for the same period in 2014.