While the escalating situation in Europe is affecting overall business confidence, retailers are bucking the trend, according to Dun & Bradstreet’s business expectations survey.
Retailers recorded renewed optimism heading into the March quarter off the back of a strong anticipated result for the annual ‘New Year Sale’ period.
The industry’s profit expectations reached positive territory for the first time in 12 months, despite over 50 per cent of retail executives anticipating slowing demand next quarter. Sales (+6), profit (+13) and capital investment (+7) expectations all improved for retailers during November.
Meanwhile, overall business confidence declined sharply with sales expectations falling five points and profit expectations remained flat based on results recorded last month. The drop in sentiment was particularly evident among manufacturers and wholesalers where sales expectations plummeted by more than 15 points since October.
Christine Christian, Dun & Bradstreet CEO, said the global economic uncertainty and financial instability for having an impact on Australian businesses.
“The sudden drop in business sentiment over the course of the last month, following fairly solid results in October, indicates the degree of volatility that is being felt in the marketplace,” she said.
“This is obviously being exacerbated, particularly in sectors like retail and manufacturing, by a high Australian dollar and the changing composition of the economy off the back of the mining boom.”