Industry anticipates better business conditions

Industry anticipates better business conditions

Industry anticipates better business conditions Insurance companies are positive that business conditions will improve in the future, according to the Commonwealth Bank’s Future Business Index, despite a moderate decline in confidence over the last quarter.

Seventy-two per cent of finance and insurance firms are looking forward to improved conditions in 2014. Compared to last quarter, more than twice as many firms (31%) expect domestic demand to drive growth.

Nonetheless, 42% anticipate higher operating costs, potentially limiting profit growth. While 61% expect higher revenues, only 40% say profits will increase.
As a result, organisations are looking to reduce headcount and capital spending.

The proportion of firms concerned over the falling Australian dollar has plummeted from 51% in September to 15% this quarter. A potential economic slump in Asia, however, is still a concern for 51% of firms.

Michael Cant, executive general manager corporate financial services at Commonwealth Bank, said: “Optimism across all businesses is being driven by a number of factors, most notably stronger revenue and profit expectations. Notwithstanding the buoyant sentiment across the mid-market, there remains a level of conservatism as businesses continue to focus on managing costs.”