Business optimism dropped in October and the change in the federal government’s leadership failed to boost business confidence, according to the latest data on business expectations by Dun & Bradstreet.
Dun & Bradsheet’s Business Expectations Survey for the first quarter of 2016 was released today and reveals business’ projections for sales and profits have fallen almost five points to 17.7 points in a month.
Analysts at the firm say this shows since the change in leadership from Tony Abbott to Malcolm Turnbull in September, the Business Expectations Index has dropped to its lowest level since June.
In September, the firm’s Business Expectations Index, which is the average of the survey’s measures of sales, profits, employment and investment, came in at 21.8 points for the final quarter of 2015.
In the report, head of group development at Dun & Bradstreet Adam Siddique said the latest results shows underlying demand is “insufficient to spur investment and borrowing” but business remains in a strong position.
“The business sector has delivered a broadly positive or indifferent response to the changes in Canberra, although this hasn’t translated into more optimistic expectations,” he said.
“It seems businesses need more time to gauge what, if any, impact the new leadership will have on their outlook.”
Alex Malley, chief executive of CPA Australia, told SmartCompany this morning the survey results could reflect sentiment before the change of leadership.
“The survey results are in part a reflection of sentiment towards the previous leadership team, as well as the challenging economic conditions,” he says.
“The change in Prime Minister and Treasurer in September has brought a new tone around pragmatic policy action and it will take time to trickle down to the big reforms in taxation and elsewhere we’re looking to see progressed.”
Malley says consumer confidence also affects business sentiment.
“At the end of the day, it’s really about consumers and demand. If consumers are confident then businesses are thriving and jobs are being created,” he says.
“I would say it is encouraging to see that businesses are generally more optimistic about growing their businesses in 2016.”
SmartCompany contacted Dun & Bradstreet but did not get a response prior to publication.