Businesses are growing more confident, but still seem to be reluctant to back it up by investing in their operations.
The latest Dun and Bradstreet Business Expectations survey shows that 61 per cent of businesses are more optimistic about their growth prospects than a year ago, while 31 per cent are less optimistic.
Capital investment intentions for the December quarter, however, remain in the doldrums, with that index only rising to 12.8 points, from 10.4 points a year earlier.
The survey showed 29 per cent of businesses believe weak demand for their products and services is the largest barrier to growth, with 13 per cent saying a shortage of skilled workers is their main concern.
Dun and Bradstreet head of corporate affairs Adam Siddique said this could explain why businesses aren’t acting on their increased confidence and maintaining a wait and see approach when it comes to planning increased investment.
“Businesses are looking for clear signs of an increase in consumer demand as the final quarter approaches, with the Australian dollar, interest rates and skills shortages all serving as peripheral factors,” he said.
“There is no avoiding the interconnected nature of global markets, however, and the Australian economy will likely be tested in the coming months by the upheaval affecting global stock markets.”
Dun and Bradstreet economic adviser Stephen Koukoulas said it is encouraging that the confidence is still there despite some stock market volatility in recent months.
“In particular, the level of expected sales is exceptionally robust and points to the economy lifting a notch over the remainder of 2015,” he said.
“It appears that the very low level of interest rates, together with the stimulatory effects of the depreciation of the Australian dollar, is behind the more favourable outlook for the economy.”