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Things looking up for Australian businesses

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Australian businesses are cautiously optimistic that overall business conditions will improve through the rest of 2009 according to the latest D&B National Business Expectations Survey released today.

The survey reveals that, following cutback in the past 12 months, 20 percent of executives intend to increase inventories in the December 2009 quarter, compared with 12 percent planning to decrease stock levels.

In addition, 16 percent of firms expect to increase capital investment, with only seven percent planning a decrease in this area. This represents the highest level in two years.

Selling price expectations have fallen to the lowest level in more than four years, with 30 percent of firms planning to increase prices and nine percent intend to cut prices.

Hiring is also on the rise, with 16 percent of businesses planning to increase staff levels compared with nine percent expecting staff reductions.

The market is still tough, however. Forty-five percent of executives reported being negatively impacted by the credit market and 46 percent were feeling the pinch from lagging business-to-business payment terms.

Another caveat tempering the survey’s positive outlook is that the improvement comes off a low comparative base, with expectations measured against the December 2008 quarter – Australia’s first quarter of negative economic growth in seventeen years.

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