D&B throws doubt on own bullish survey

And I’m not surprised. As I have myself observed, the Dun and Bradstreet Business Expectations survey has been getting more and more delusional as the year has worn on. Now it is official:

The recent performance of Australian businesses is failing to meet their own expectations as a continuation of below-trend growth in the economy begins to impact reported activity this year.

According to Dun & Bradstreet’s Business Expectations Survey, sales and earnings in particular are falling further behind the three-month projections being made by businesses.

Compared to initial expectations, the number of businesses that achieved an increase in sales during the third quarter fell from 43 per cent to 38 per cent. At the same time, the proportion of businesses that reported reduced sales was 20 per cent; more than the 11 per cent that had initially forecast weaker activity. These responses have moved the actual sales index to 18.3 points for the September quarter, short of the expectations index of 32.5 points. Upbeat sales forecasts through to the first quarter of next year have lifted the index further, to 38.7 points.

Breaking it down further, the hope is at almost painful levels now. In sales:

In profits:

In jobs:

In capex:

In price rises:

The distortion is probably the result of the composition of the survey. Like the superior NAB business survey, the D&B snapshot does not take full account of mining. I expect all of these to suffer some dour realisation in the not too distant future.