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Confidence rides high on economyBusiness confidence is returning to levels not reached since the early stages of the resources boom, prompting firms to upgrade investment and employment plans. Profit and sales expectations for the June quarter are at their strongest in more than five years as companies buoyed by solid gains late last year anticipate the recovery to accelerate in coming months, a Dun and Bradstreet survey of 1200 business owners and senior executives has found. Reflecting the sharp turnaround in the economy’s fortunes since the depths of the global financial crisis early last year, the study found a substantial improvement in the trading outlook among firms compared with the same time last year. Almost one in two firms anticipates sales to rise in the June quarter. The survey’s index of sales expectations jumped 5 points to 33 points – the strongest reading in six years and 81 points above the point reached 12 months earlier – while the profit expectations index lifted by 8 points to reach a five-year-high of 18 points. The optimistic outlook has encouraged firms to consider taking on more staff and boosting investment, with the survey’s measure of employment intentions jumping to 9 points, a level not reached since the global financial crisis struck, while capital expenditure plans are at their most robust in more than six years. Further evidence of the strength of demand for workers will be provided by the Australian and New Zealand Banking Group’s job advertisements survey for February due to be released today, but economists tip that, after adding almost 53,000 jobs in January, the labour market will have slowed last month, predicting that just 15,000 jobs were created, though this would be sufficient to keep the unemployment rate steady at 5.3 per cent. The Australian Financial Review - Monday 9 March 2010
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