The end is (nearly) nigh...

Stephen Koukoulas

The recent Dun and Bradstreet Business Expectations survey confirmed a softening in business expectations for the economy into the second half of 2017. As a summary of the survey findings, as Australia grabs the world record for uninterrupted economic growth, the signs are mainly pointing downwards. Business performance for the first quarter has hit a four–year low, resulting in lower expectations for the second half of the year. Dun & Bradstreet's May Business Expectations Survey shows a generally muted outlook for the September quarter of 2017 despite employment expectations reaching a two-year high.

The official GDP data, which confirmed a clear slowing in the rate of economic growth, was fully anticipated by the Dun & Bradstreet Business survey. Business expectations have dropped off for the September quarter 2017 following a softer-than-expected March quarter on the back of lower actual sales, profits, employment, selling prices and investment in the first quarter. This continues to highlight the importance of the Business Expectations Survey as an early indicator in turning points in key aspects of the economy – in this instance overall economic growth. The survey also has a solid record in anticipating turning points in other variables such as selling prices, employment and profits.

A slow start to 2017 has led to a decline in optimism moving into the second half of the year. Dun & Bradstreet’s latest Business Expectations Survey shows a generally muted outlook for the September quarter of 2017; however, expectations for employment are at a more than two-year high. Businesses have flagged concerns about the rising cost of utilities, as well as online selling by competitors.

The optimism from the business sector at the end of 2016 and the early part of 2017 has not been sustained. Business expectations remain cautious for the September quarter following the particularly weak ‘actual’ outcome for the March quarter.

The information from the business sector accords with the recent official news on the economy – sluggish growth characterised by weak sales, profits, and capital expenditure, yet surprising resilience in employment.

You can access the link to the full survey results from here: (VIEW LINK)


About this contributor

Stephen Koukoulas

Stephen Koukoulas

Chief Economist, Market Economics Pty Ltd

Stephen Koukoulas has a rare and specialised professional experience over more than 25 years as an economist in government, as Global Head of economic and market research, a Chief Economist for two major banks and as economic advisor to the Prime...

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