Sales optimism rising, says survey

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The Independent Online
A DUN & Bradstreet survey will this week disclose a sharp rise in British business optimism over prospects for sales and profits in the first quarter.

The World Business Survey, expected on Thursday, will also show optimism remaining strong in the US but tumbling sharply in Germany and France, where recent indicators point to a steep economic downturn.

The business information firm says UK optimism about profits has rebounded more sharply than at any time since the fourth quarter of 1991, when hopes of recovery briefly surfaced.

There was also a bounce in optimism about first-quarter sales, though the trend was less marked.

But companies remain as pessimistic over job-shedding as they were in the fourth quarter of last year, which may lend weight to predictions that the jobless total - which in January breached 3 million before adjustment for seasonal influences - will continue to climb.

The findings of the Dun & Bradstreet survey contrast sharply with Gallup's February survey of consumer optimism, which shows that confidence has dropped more sharply than at any time since last August.

The Gallup poll reverses the rise in optimism registered in January and is the first decline since the slide in confidence after sterling was forced out of the European exchange rate mechanism.

Consumers expressed mounting pessimism about their financial circumstances, and about rising inflation after the surge in import prices following the recent fall in the pound.

Government hopes that retail sales will continue to rise, after a 1.6 per cent jump in sales volumes in January, were dealt a blow by the growing number of consumers who no longer think this is a good time to make a large purchase.

City economists expressed reservations about last week's sales figures. The rise in January sales contrasted with a 1 per cent fall in December sales and led to worries that both sets of figures were affected by poor seasonal adjustments. If so, sales over the two months show only a modest increase, and bolster the Gallup findings.

Nevertheless, official figures tomorrow are expected to show that national output expanded slightly in the fourth quarter.

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