Conflicting business sentiment – a cause for concern?

Apr 25, 2016 | Corporate Insolvency

Making sense of the regular analyses into the Australian economy can be a challenge at the best of times, but when two high-profile information releases seem to run counter to one another, it’s easy to quickly become confused. Whether or not your organisation identifies with one opinion or the other, knowing how confidence and sentiment are sitting amongst the wider business environment can be useful information.

Let’s take a look at two recently conflicting announcements, and whether either should be of concern should your business be experiencing money problems.


Business confidence on the up in March


According to research from Roy Morgan, business confidence across the nation rose by 2.4 points in March, for a total rise of 5.1 points across the past two months. Attributed to improvements on the Australian share-market as well as discussions in Canberra bringing the Federal Budget forward a week, the index now sits just below the five-year average at 115.7 points.

For any companies feeling the pressure of a troubling time for the economy, the signals seem to point towards better days ahead. However, a similar announcement from another analysis firm may be cause for concern.


Business sentiment sliding in Q2


Despite the positivity coming from Roy Morgan, Dun & Bradstreet’s monthly Business Expectations Index fell for the second consecutive period, sagging to 12.7 points for the second quarter of 2016. While certainly not an ideal result, the firm notes that there’s not yet cause for alarm.

“While two consecutive quarters of declining survey results clearly shows that businesses are realigning their trading expectations down from the highs of 2015, we aren’t observing widespread evidence that supports an overly gloomy outlook,” said Adam Siddique, head of group development for Dun & Bradstreet.

More of a course correction than an actual decline, it seems the figures are supporting the notion of a healthier economy for the remainder of 2016 than one might think from the report.


Is your business equipped to handle growth?


Should the economy continue to improve and lead to growth in your business, it’s important to be prepared for what’s to come. The Queensland government notes several ways in which rapid growth can lead to problems in a company, including staff struggling to cope with extra workloads, greater pressure on management or a shortage of cash to meet expansion costs.

To avoid being a victim of the old saying “The flame that burns twice as bright burns half as long,” speak to Corporate Lifeline about how to improve your organisation’s financial performance.


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If you find yourself in a situation where you need financial advice for your business, let us help you.