Australian business is looking forward to a mostly merry Christmas according to the latest Dun and Bradstreet Business Expectations Survey.
Dun & Bradstreet’s Business Expectations Index, the average of the survey’s measures of sales, profits, employment and capital investment, climbed to 17.0 points in the latest survey, which looks at the fourth quarter of 2016. That’s up from 12.4 points for Q3 2016 and the print of 17 is 9.1 points above the 10-year average of 7.9 points.
Stephen Koukoulas, economics advisor to Dun & Bradstreet, said “The generally positive tone to business expectations has continued, which points to an on-going solid pace of expansion for the economy over the remainder of 2016. The upswing for expected sales, profits and employment has been sustained in the most recent survey”.
The result is really positive when viewed against the subdued outlook for selling prices.
The survey reveals “expectations for selling prices in the three months to 31 December remained flat compared to last quarter, with the index at 9.3 points” Dun anmd Bradstreet said.
Only 19.8% of firms expect to increase their selling prices this quarter, while 10.5% expect to lower them.
“Compared to the final quarter of 2015, the Selling Prices Expectations Index has fallen 42.6 per cent from 16.2 points” the survey showed.
But even with the backdrop of weak pricing pressure and low ability to increase income via this channel the survey showed that profit expectations sub-index surged from 9.4 to 17.1 for the Christmas quarter. That’s potentially driven by the fact that business is optimistic about domestic spending with the the Sales Expectations Index jumping 8.7 points to 30.1 points, up from 21.4 points in the previous quarter.
And the good news for business is potentially good news for workers as well with the survey showing that the Employment Expectations Index also increased jumping to 13.0 points, from 8.2 points previously.
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