By Anhar Khanbhai

The sales expectations of Australian businesses have hit an eight-year high, with expected interest rate reductions boosting confidence, according to a new study by consultants Dun & Bradstreet.

Conducted last month, the group's national survey found that manufacturing, retail and wholesale firms were expecting a jump in sales and profitability in the June quarter.

Retail and wholesale sectors shows that preliminary expectations for the June quarter are strong, with a balance of +21 in terms of sales and a +8 forecast for profits.
 
Sales forecasts are now at their highest level since the December quarter in 2003, while investment expectations have hit a peak not seen since December 2010.

Dun & Bradstreet CEO Christine Christian  said businesses were factoring in the positive impact of further interest rate cuts and assuming the Australian dollar would remain stable.

She said the June quarter was traditionally the strongest quarter for businesses and this also partly contributed to the more upbeat expectations.

“Historically, leading indicators of financial stability, such as cashflow, have improved during the June quarter as firms gain momentum,” Christian said.
 
“We are also no doubt seeing businesses increasingly factoring in the impact of further interest rate reductions on their operations.”