Retail optimism wanes


clothesDespite solid December quarter trade the general outlook from retailers has declined, according to Dun & Bradstreet’s latest Business Expectations Survey.

The sector’s sales, employment, profit, and investment indices have all fallen from the previous quarter, although still remain higher than the same time last year. At 60 per cent, retailers’ optimism about the year’s trade is six per cent lower than the national average.

A slow growth in demand for products (28 per cent) and online selling by competitors (14 per cent) have been flagged as barriers to growth during the year.

Generally, the Business Expectations Survey found that the number of businesses indicating they will hire staff in the months ahead has increased for a third consecutive quarter. Twenty two per cent of businesses plan to employ new staff during Q2 2014, compared to 12 per cent which expect to reduce numbers.

The response from businesses has lifted the employment expectations index to 9.2 points, up from 0.1 points a year earlier and to its highest level since the first quarter of 2011.

D&B’s actual employment index, as reported by businesses for the last quarter of 2013, has continued to lift out of the negative territory it occupied across the majority of the past 24 months.

“After seeing a steady pick up in the outlook for sales, selling prices, and profits from late last year, we’re now seeing employment intentions improve,” said Gareth Jones, CEO of Dun & Bradstreet Australia and New Zealand.

“While the official rate sits at six per cent, and we’ve seen negative headline news on jobs, the outlook from businesses reveals a resilient optimism.

“Last year’s soft conditions forced businesses to manage their costs closely and become more efficient in their operations. With confidence returning, interest rates remaining low and global conditions recovering, businesses now appear ready to focus on growth,” Jones added.

Confidence levels also remain steady, with D&B finding that 66 per cent of businesses expect stronger growth during the year compared to 2013, while the capital investment index has strengthened for a second consecutive quarter to 10.0 points, up from 5.0 points a year ago.

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