The latest Dun and Bradstreet Business Expectations Survey shows a very solid increase in profits forecasts which are closing in on a 10-year high.
The profits index jumped from 19.9 last quarter to 29.1 this quarter, just below the 10-year high of 29.7.
40% of survey respondents now expect higher profits in Q4 2014 with only 11% expecting a weaker outcome. The other 49% expect no change.
This data and the outcomes which flow from it are counter to what has been the prevailing wisdom recently and a widely held market view that the economy was in a fairly weak position. Dun and Bradstreet said:
In addition to increased earnings, D&B has found that more firms expect to sell more products, hire more staff and raise the level of their capital spending. Compared to last year, both sales and hiring plans have moved to an 11-year high, while the investment index has recorded its most positive response since 2010.
With the exception of selling prices, the break-up of the index shows increased and improved expectations on sales, employment, profits and capital investment.
It’s a positive outlook for business and D&B economic adviser Stephen Koukoulas noted: “D&B’s data suggest that the economy is poised to run at – or even above – trend levels in the second half of 2014, with expected employment and capital expenditure also well above the long run average.”
Good economic news.