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Source: Reuters
Capital investment expectations for the June quarter have risen to the highest level in seven years and employment expectations are back in the black, a survey of Australian businesses shows.
In a further sign of business confidence about the year ahead, a Dun & Bradstreet survey of business expectations about the upcoming June quarter found capital investment expectations reached an index of 10 and employment expectation rose to an index of five.
Twelve percent of firms surveyed expect to increase capital investment, while just 2% are planning to decrease spending in this area.
The survey showed profits expectations were on the rise, up five points to 15.
"Capacity issues and fierce competition for skilled labour looks set to return as a feature of the Australian economy as firms report their strongest expectations in many years for inventory and employment growth," Dun & Bradstreet said in a statement.
The survey showed 11% of firms are planning to increase staff levels, while 6% planned to reduce employee numbers.
"These figures are now a 31% improvement on the June quarter 2009 expected employment index figure of minus twenty six percentage points," the company said.
"Despite reports of recent falls in job advertisement numbers, all sectors now have positive expectations for growth in employment numbers."
In the durables manufacturing sector a whopping 14% of businesses are expecting to increase employment and 7% are expecting to decrease staff numbers.
Dun & Bradstreet chief executive Christine Christian said the expectation of increased intention to employ staff was a sign that Australian firms believe 2010 will be better than the difficult year of 2009.
"With unemployment being seen as a major concern throughout 2009 the improved employment expectations across all sectors is welcome news for both those who are in the labour market and for business confidence on the whole," Christian said.
The expectation for growth inventories in the December, March and June quarters are at the highest levels in four years and selling price expectations have shot up, rising eight points from the March quarter index of nine.
However, sales expectations dropped slightly by three points to an index of 25.
The survey also found more than a third of Australian businesses are being hit by current credit market conditions.
Thirty five percent of firms indicated that business credit
conditions are "detrimentally impacting operations," while 17%
report a positive impact.
Fifteen percent of executives expect to increase inventories in the
June 2010 quarter, while 12% plan to reduce stock levels.
Meanwhile, rising business-to-business payment days continue to hurt one in three firms, the survey showed.
A trade payment analysis of the more than nine million current accounts receivable records contained on the Dun & Bradstreet database revealed a deterioration in payment terms of 2.1 days in the December 2009 quarter.
"The retail sector has seen the greatest improvement returning to positive territory with an index of 13, up 25 points from a low of -12 in March quarter 2009," the survey said.
The survey showed more than a quarter of Australian executives now anticipate profits will increase in the June quarter and only 12% expect a fall, with 30% of executives from the retail sector expecting an increase and just 10% a decrease.
Almost 40% of firms expect an increase in sales and 14% a decrease in sales in June quarter 2010.
