The Dun and Bradstreet Business Expectations survey is out this morning and shows some more momentum in confidence:
The final two charts are encouraging but both fly in the face of the similar but deeper NAB survey which sees no such upswing yet in conditions. Still, cyclical momentum is what we’re after and this is evidence in support of it. The Kouk goes hog wild:
“The hint of optimism about the business climate that was evident around the September quarter 2013 is developing into a broadly based upswing,” said Stephen Koukoulas, Economic Adviser to Dun & Bradstreet. “Not only are firms optimistic about expected sales, profits and selling prices, but there is a clear uptrend now evident in expected capital expenditure and employment.
“The current dynamics in the Business Expectations Survey suggests GDP growth will exceed 3 per cent in 2014,” he added. “There is little prospect for further interest rate cuts with expected selling prices on the rise. Indeed, if the upward momentum in business conditions continues with similar momentum in the months ahead, the market will be correct to price in interest rate increases during 2014. “This is a good news story, with the business sector increasingly positive about the economic outlook.”
Yep, good news, but the structural overhang still looms. There’ll be no rate rises in 2014 unless housing keeps going nuts and, if so, we’ll very quickly be heading down again.
