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.

comments powered by Disqus

THE LATEST FROM THE KOUK

The Australian stock market is a global dog.

Sat, 24 Jun 2017

This article first appeared on the Yahoo7 web page at this link: https://au.finance.yahoo.com/news/1381246-234254873.html 

----------------------------------------------------

The Australian stock market is a global dog.

At a time when stock markets in the big, industrialised countries are zooming to record high after record high, the ASX200 index is going no where. So poor has the performance been that the ASX is around 20 per cent below the level prevailing in 2008.

It is a picture most evident in the last few years. Since the middle of 2013, the ASX 200 has risen by just 10 per cent. The US stock market, by contrast, has risen by 50 per cent, in Germany the rise has been 55 per cent, in Canada the rise has been 20 per cent, in Japan the rise has been 45 per cent while in the UK, with all its troubles, the rise has been 15 per cent.

So what has gone wrong?

Tony Abbott and debt

Fri, 16 Jun 2017

With Tony Abbott and governemnt debt hot news topics at the moment, I thought I would repost this artricle which I wrote in April 2013:

Enjoy, SK

------------------------

Here’s a true story. It’s about a man called Tony.

Tony is a hard working Aussie, doing his best to provide for his family. He has a good job, but such is the nature of his work that his income is subject to unpredictable, sharp and sudden changes.

Tony’s much loved and wonderful children go to a private school and wow, those fees that he choses to pay are high. He used to have a moderate mortgage, especially given he was doing well with an income well over $200,000 per annum.

Then things on the income side turned sour.

Tony had a change in work status that resulted in his annual income dropping by around $90,000 – a big loss in anyone’s language.

How did Tony respond to this 40 per cent drop in income?

Well, rather than selling the house and moving into smaller, more affordable premises, or taking his children out of the private school system and saving tens of thousands of after tax dollars, Tony called up his friendly mortgage provider and refinanced his mortgage.

In other words, Tony took on a huge chunk of extra debt so that he could maintain his family’s lifestyle. No belt tightening, no attempt to live within his means, just more debt.