THE outlook for the Australian economy is strong despite weakness in consumer spending.
A Dun & Bradstreet business expectations survey shows near-record expectations for most sectors, but retailers have reported some of their most difficult circumstances for years.
The report said companies exposed to the emerging economies in Asia were keeping the economy going full steam ahead, while retailers struggle to get consumers to spend.
Dun & Bradstreet director of corporate affairs Damian Karmelich said the result showed a clear gap emerging between retailers and the rest of the economy.
“During the Christmas period, there has been an understandable focus on the challenges faced by retailers and the survey shows that retailers are preparing to discount in response to those challenges,” he said.
“However, for firms engaged in business-to-business trade and exposed to the growth of emerging economies like China, the outlook is positive.”
Forty per cent of the executives surveyed rank interest rates as the primary influence on their business, a rise of 14 per cent in two months and the highest figure recorded since May 2009.
The sales expectation index was down three points to an index of 31, but was still above those of the six years to the March quarter of 2010.
The inventories index was down three points to 10 but is at its second-highest level in seven years.
Employment expectations have risen one point to an index of nine, the highest figure recorded in seven years.
Meanwhile, the capital investment expectations index fell four points to 14. Despite this, the index remained above the figures recorded in the six years from the March quarter 2010 to the March quarter 2010, D&B said in a statement.
Dun & Bradstreet business expectations survey canvassed 1,200 business owners and senior executives representing major industry sectors across Australia in December 2010.
Source: www.heraldsun.com.au
