The Dun and Bradstreet Business Expectations Index for Q2 is out and whoops:
The results from Dun & Bradstreet’s February Business Expectations Survey have highlighted a sharp decline in expectations for the second quarter, with businesses issuing gloomy forecasts for the three-month period to June 2016. Dun & Bradstreet’s Business Expectations Index, the average of the survey’s measures of Sales, Profits, Employment and Capital Investment, has fallen to 13.2 points for the second quarter of 2016, down 5.7 points from 18.9 points for Q1 2016, and a fall of 6.9 points from 20.1 points for Q2 2015. Nonetheless, it is significantly higher than the 10-year average of 7.0 points.
The headline measures slid:
Services collapsed:
Sales were hit:
Profit hopes pounded:
Employment fading fast:
Likewise capex:
But inflation is all good:
There is no mining in this index so not much hope for “rebalancing” there. The Kouk is set to come about on rate hikes:
According to Stephen Koukoulas, Economic Advisor to Dun & Bradstreet, “the slippage in business expectations is across the board with expected sales, profits, employment and new capital expenditure slipping to their lowest level in around two years. It is likely that the global financial market ructions in the early part of 2016 and now the policy uncertainty associated with the upcoming election could be dampening the spirits for the business sector.”
This index is not a very useful forecasting tool. But it is decent for “nowcasting” given that expectations appears to lag (not lead) actual conditions by a quarter. That suggests that economic activity right now is sagging.
