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2014 Federal Budget Creates Worries For Businesses

Jenna Hanson
Business and Technology Journalist

Jenna Hanson covers business news and technology for Smarter Business™

Jenna Hanson
Business and Technology Journalist

Jenna Hanson covers business news and technology for Smarter Business™

The 2014 federal budget has produced mixed feelings across industries, with manufacturers and wholesalers remaining positive and Retailers anticipating a sharp drop in sales, according to a new report.

Falling consumer confidence has meant that 25 per cent of retailers are expecting a fall in earnings over the next period, dropping into negative territory for the first time since mid-2012. In fact, Dun & Bradstreet’s Business Expectations Survey for Q3 2014 has found that 59 per cent of businesses are concerned about the impact of the federal budget on their operations.

“The fall in expected earnings for retailers is reflective of the mood among consumers, which has dropped significantly following the release of the budget,” said Gareth Jones, CEO of Dun & Bradstreet – Australia and New Zealand.

“Combined with soft wages growth and signs from D&B’s Consumer Financial Stress Index that individuals are finding conditions more difficult, it’s unsurprising that many businesses expect to see spending levels fall away.”

piggy bank and tape measure
59 per cent of businesses are concerned about the impact of the Federal Budget on their operations.

- DUN & BRADSTREET BUSINESS EXPECTATION SURVEY

Despite this, the manufacturing sector has raised its outlook for profits and sales to 10-year highs, with 46 per cent of manufacturers anticipating higher profits in the third quarter and 57 per cent expecting increased sales. In addition to 62 per cent of respondents indicating confidence about growth this year, the survey reveals that business expectations have remained higher than last year despite marginal quarter-on-quarter declines in the sales, profits and selling prices indices.

“Despite concerns from business about the potential impact of the budget, expectations are, on balance, favourable for the next three months,” said Stephen Koukoulas, Dun & Bradstreet’s economic advisor. 

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