Retailers and service providers are feeling more confident in the run-up towards Christmas than in previous years, and few intend to offer discounts.
Credit information bureau Dun & Bradstreet (D&B) says retailers and the services sector are lifting their forecasts for the last three months of 2014 even though consumer confidence is faltering.
D&B's latest Business Expectations Survey says 47 per cent of businesses expect higher sales compared to last year, 11 per cent expect a decline, and 42 per cent expect similar trade.
A growing number of businesses expect consumers to open their wallets in the December quarter but are not planning to offer discounts.
Twenty-four per cent of businesses intend to raise prices, six per cent will cut prices, and the rest will leave prices unchanged.
"While we often see an uptick in business expectations for the Christmas period, the current outlook appears stronger and more broad-based than recent years," Dun & Bradstreet director Steve Brown said on Tuesday.
Businesses not only expect higher sales and profits, they also expect to invest more in their business and hire more workers, compared to 2013.
But the health of consumer finances and the willingness of Australians to increase their discretionary spending over the next few months is still questionable.
Also, many businesses are still worried about cash flow, with 31 per cent indicating it is the issue most likely to affect their operations during the last three months of 2014.
The D&B survey reported that 35 per cent of businesses had a customer or supplier unable to pay them or become insolvent during 2013.
Fifty per cent of businesses expect no impact from the current level of the Australian dollar.
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