Businesses get 2015 confidence boost from tumbling inflation

 
Chris Papadopoullos
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Prices at the pump are plummeting, providing a boost to businesses and consumers
BUSINESSES expect a solid start to 2015, according to new survey data.

The BDO optimism index released today by the eponymous accountants rose to 104.9 in December from 103.9 in November.

The long-term average is signified by 100. The output index remained steady at 103.3 in December from November’s 103.2.

The inflation index edged down to in December 95.4 from November’s 95.8. It has fallen for eight consecutive months, due largely to drops in oil prices. It is expected to reduce firms’ input costs and boost the purchasing power of workers’ wages.

“This is a great start to 2015. Optimism has increased, hiring expectations remain strong and inflationary pressures are down,” said Peter Hemington, a partner at BDO. Firms’ high optimism over the start of 2015 suggests that weakness in other survey data such as the purchasing managers’ index may be reversed.