MEDIA RELEASE – 01 October 2013: Suppliers’ business expectations flat, but confidence re-emerging

The short-term business outlook from suppliers and service providers to the resources, construction and infrastructure sectors in Australia is flat, but confidence is re-emerging with many expecting growth in sales revenue, profits, hiring intentions and marketing investment.

Projectory’s September quarterly survey of business expectations revealed that while most suppliers and service providers expected business conditions to remain flat in the December quarter, 44% expect sales revenue to increase.

A total of 45% of respondents said sales revenue would remain the same while only 11% said it would fall.

Victoria was the most optimistic state about sales revenue, followed by Queensland, Western Australia, New South Wales and South Australia. This was reflected in profits among the states with the exception of Queensland and Western Australia where profits are expected to remain the same.

Wade Business Media director and Projectory publisher and editor-in-chief Jamie Wade said the positive outlook was most likely due to the continuing stream of work from major mining and oil and gas projects in WA.

“Packages are continuing to being awarded for major projects such as the Gorgon Project, the Roy Hill Iron Ore Project and the Wheatstone LNG Project and this is continuing to drive work for many companies. However, beyond these big projects work is becoming harder to find,” he said.

“Nationwide, a quarter of respondents said they had 18 months or more work in the pipeline while 21% said they had about six months work in the pipeline. However, a third of WA suppliers and service providers that responded to the survey have more than six months work in the pipeline, but only 16% have 18 months work or more in the pipeline.”

More than a third of respondents expected profits to rise in the December quarter while 44% said it would remain the same. A total of 22% of respondents said profits would fall.

Hiring intentions for the December quarter were also strong with 28% indicating they would be hiring more staff. A total of 54% of respondents said hiring would remain the same while 18% said it would fall.

The outlook on marketing investment was also high with 25% intending to boost their marketing investment. A total of 58% said they would invest the same and only 16% said they would invest less.

The overwhelming majority of respondents expect no change in the short term in non-wage labour costs, overtime utilization and wage growth.

Selling prices are highly unlikely to change with more than 68% of respondents expecting no change in selling prices and nearly a quarter of respondents expecting selling prices to lower.

Mining suppliers and service providers in each state all agree that that the national and global economies will be somewhat stronger in the next 12 months.

The overwhelming majority of respondents said the change in Federal Government would have a positive impact on their business in the December quarter and the next 12 months at 72% and 86% respectively.

“Interest is turning more towards major infrastructure projects given the newly elected Federal Government’s promise to invest in the nation’s infrastructure – particularly road networks,” Mr Wade said.

Projectory’s September Quarterly Survey of Business Expectations received a total of 132 responses across Australia.

Respondents included manufacturers (29.8%), service providers – non-engineering (29%), service provider – engineering (20.6%), consultants (11.5%) and distributors (8.4%).

Respondents comprised marketing or sales personnel (45.7%), senior managers (36.2%), owner-operators (13.4%) and product or technical personnel (4.7%).

For more information, contact Projectory publisher and editor-in-chief Jamie Wade on 0435 945 868 or email jamie@wadebusiness.com.au.

About Projectory

Established in 2010, Projectory is an online lead generation service for suppliers and service providers seeking business opportunities with major projects in Australia.

Projectory provides leads and news on the planning and development of major resource, construction, energy, infrastructure and defence projects in Australia typically worth more than $AUD30million.

Wade Business Media Pty Ltd publishes Projectory.

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