D&B business expectations hit hard

From the new Dun and Bradstreet Business Expectations survey:

According to Stephen Koukoulas, Economic Advisor to Dun & Bradstreet: “The latest business expectations data has cast a shadow over what had been a period of stronger economic performance. There has been a fall in each of the components of the Index, with the overall Business Expectations Index slipping to its lowest level in over two years.

“The BEI is consistent with GDP growth of around 2.5 per cent, which is a little weaker than the 3 per cent growth rate recorded in the year to the end of 2015,” Mr Koukoulas noted.

Mr Koukoulas added: “It is difficult to pinpoint why businesses are reporting a souring in the business expectations climate, other than perhaps the issues that may be thrown up in the looming federal election and ongoing uncertainty surrounding global economic conditions, especially in China.”

The survey revealed particularly pessimistic forecasts from the Retail and Services sectors, both of which reported sharp declines in expectations for the upcoming quarter. Based on the latest data, the Retail sector reported a 47.1% decline in expectations for Q2 2016, compared with Q1 2016, while the Services sector’s expectations more than halved. The only sector which did not report a decline over the month was the Construction sector, with expectations remaining unchanged compared with the previous quarter.

And the details. Sales sagging:

Profits tanking:

Employment sliding:

Capex disappearing:

Inflation eroding:

Is it really so hard to pinpoint what is happening?

• global volatility and an obviously dubious rally in commodity prices;
• stalling and falling house prices;
• inept political bastardry with a long election campaign;
• crazy high dollar, and
• a clear convergence of negatives in H2 as cars, residential construction and mining all shed jobs.

The Kouk weathervane is about to swing 180 degrees from imminent and multiple rate hikes…