The profits index from the Dun & Bradsheet (D&B) quarterly Business Expectations Survey hit 34.9 points, the highest level since 2003 according to a November 5 media release from D&B.

The survey found the share of Australian companies expecting an increase in earnings during the first quarter of 2014 reached 36 per cent, with businesses anticipating a jump in takings in the New Year on the back of stronger sales and firmer selling prices.

Previous quarterly surveys this year produced profits index results in the low 20s, including 21.1 points last quarter.

Business outlook appears to have now entered an upward trend, with profit and sales expectations lifting and employment and investment intentions have stabilised.

Sales expectations for early 2014 have risen to 13.9 points, with 16 per cent of businesses anticipating activity to increase while just two per cent forecast weaker trade.

Healthier profit margins for retailers in Australia are also supported by the 18 per cent of businesses who plan to raise the prices for their goods and services in the first quarter of 2014.

This result has caused D&B’s selling prices index to rise to 15.6 points, its highest level in over a year.

Near-term business optimism is clearly shared among the majority of retail companies, according to Dun & Bradstreet CEO Gareth Jones, although he adds it is still early days.

“We’ve recently seen the effects of rate cuts on consumer confidence levels through a rebounding property and sharemarket, and now it appears we’re seeing that same positive impact filter through to the business sector.”

It appears caution remains in retailing in Australia despite improving business optimism, with retailers split on whether 2014 will be more profitable than 2013.

While 63 per cent believe growth is nearly certain, the same percentage are less optimistic, while 28 per cent remain undecided.