Australian business optimism waning for 2015

24th April 2015

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Optimism is steadily leaving Australian businesses, with expectations for sales growth and expansion returning to levels not seen since last year. 

The percentage of companies with an optimistic outlook for growth in 2015 has fallen to the same level it was only one year earlier, according to a survey from Dun & Bradstreet on business expectations.

Only 64 per cent of businesses in the most recent survey were more positive about growth in 2015 than they were for last year. This is despite an increase in the percentage recorded in the December quarter when the survey found 73 per cent were hopeful about the future.

Businesses were not buoyed by the continuing availability of cheap credit when the Reserve Bank of Australia decided to keep interest rates at 2.25 per cent. Only one in five businesses (19 per cent) plan to seek new credit in the next quarter, according to the survey. This remained largely unchanged from the last quarter.

Dun & Bradstreet's sales expectations has also taken a tumble after previously rising in the past two quarters.

The index has dropped from 38.7 points to 34.8 points for the June quarter, putting it on track for the same reading as last year. The index also discovered that nearly half of businesses (48 per cent)  anticipate higher sales in the next three months, with 13 per cent expecting a decline and 39 per cent expecting no change.

Small business accounting software can be one way for companies to monitor how their sales figures are compared to previous quarters. This may determine whether expectations of lower sales growth for 2015 are all media hype or whether the pessimistic attitude of the survey is warranted.

Without a sustained level of positive news about the economy, business sentiment was stalling, according to Gareth Jones, CEO of Dun & Bradstreet in Australia and New Zealand.

"Businesses are being exposed to more negative economic news than positive, which is undermining confidence and influencing near-term expectations," said Mr Jones. "The relatively upbeat mood that was evident among a number of sectors at the end of last year and into January appears to have faded."