The end is (nearly) nigh - D&B Business expectations

Thu, 08 Jun 2017  |  

The recent Dun & Bradstreet Business Expectations survey confirmed a softening in business expectations for the economy into the second half of 2017.

The link to the full survey results is here: https://dnb.com.au/_media/documents/DB%20Australian%20Business%20Expectations%20Survey%20-%20full%20-%20Q3%202017%20interim.pdf 

A summary of the survey findings are here:

As Australia grabs the world record for uninterrupted economic growth, the signs are mainly pointing downwards. Business performance for the first quarter has hit a four–year low, resulting in lower expectations for the second half of the year. Dun & Bradstreet's May Business Expectations Survey shows a generally muted outlook for the September quarter of 2017 despite employment expectations reaching a two-year high.

The official GDP data, which confirmed a clear slowing in the rate of economic growth, was fully anticipated by the Dun & Bradstreet Business survey. Business expectations have dropped off for the September quarter 2017 following a softer-than-expected March quarter on the back of lower actual sales, profits, employment, selling prices and investment in the first quarter. This continues to highlight the importance of the Business Expectations Survey as an early indicator in turning points in key aspects of the economy – in this instance overall economic growth. The survey also has a solid record in anticipating turning points in other variables such as selling prices, employment and profits.

A slow start to 2017 has led to a decline in optimism moving into the second half of the year. Dun & Bradstreet’s latest Business Expectations Survey shows a generally muted outlook for the September quarter of 2017; however, expectations for employment are at a more than two-year high. Businesses have flagged concerns about the rising cost of utilities, as well as online selling by competitors.

According to Dun & Bradstreet Economic Adviser Stephen Koukoulas: “The optimism from the business sector at the end of 2016 and the early part of 2017 has not been sustained. Business expectations remain cautious for the September quarter following the particularly weak ‘actual’ outcome for the March quarter.

The information from the business sector accords with the recent official news on the economy – sluggish growth characterised by weak sales, profits, and capital expenditure, yet surprising resilience in employment.

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Oz economy: The good, the bad and the ugly

Fri, 08 Dec 2017

This article first appeared on the Yahoo 7 Finance website at this link: https://au.finance.yahoo.com/news/2138618-050543271.html 

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Oz economy: The good, the bad and the ugly

The Australian economy continues to grow, but the pace of expansion remains moderate, being constrained by ongoing weakness in household spending and a slide in housing construction. The good news is further evidence of an upturn in private business investment and stronger growth in public sector infrastructure spending which is providing support for the economy.

At face value, 2.8 per cent annual GDP growth rate is quite good, but the devil in the detail on how that growth has been registered is why there are some concerns about the sustainability of the expansion as 2018 looms.

Household spending remains mired with growth of just 0.1 per cent in the September quarter. It seems the very low wage growth evident in recent years, plus data showing a small rise in the household saving rate, is keeping consumer spending in check.

Making up well over half of GDP, household spending will be the vital element of the economy into 2018. If wages growth remains weak, there seems little prospect of a pick up in household spending. And if household spending remains weak, bottom line GDP growth will be relying on a strong expansion in business investment and public sector demand.