(Australian Associated Press)
Australian businesses are predicting strong sales growth and higher profits in one of their most optimistic outlooks in 12 years.
Dun and Bradstreet’s Sales Expectations Index for the final quarter of 2015 has jumped to 40.8 points, up from 28.6 points in the previous quarter.
It’s also the highest reading since 2003.
The survey of 400 companies also found 48 per cent expect to see an increase in sales in the fourth quarter.
The upbeat sales outlook is fuelling expectations of higher profits and more jobs, Dun and Bradstreet economic adviser Stephen Koukoulas says.
“Record low interest rates and a weak Australian dollar are likely factors behind the lift in business optimism,” he said.
“Firms are looking for a strong pickup in activity through to the end of 2015, and this positive news is spilling over into higher expected profits, a lift in employment and steady capital expenditure.”
Dun and Bradstreet head of corporate affairs Adam Siddique said the federal government’s tax benefits for small businesses may also be offsetting concerns about weak consumer demand.
He said the discussion around GST changes for imported online purchases and the lower Australian dollar could also be boosting business confidence.
The overall outlook for capital investment remains flat, however the retail sector is showing more promising signs.
Nearly 20 per cent of retailers have forecast increased capital investment compared with 18.4 per cent in the previous quarter and 10.7 per cent in the same period a year ago.
However, record low interest rates have not translated into increased borrowing expectations with just 15.6 per cent of companies planning to borrow to grow their business in the quarter ahead.