March 18, 2010The March quarter 2010
ACCI-
Westpac Survey of Industrial Trends reveals slower activity growth, and softer net indicators, contrasting with a firming of general business confidence and stronger forward projections by participating manufacturers.
While above predictions, the net indicators for new orders and output declined over the March quarter.
The marginally negative net outcome for exports was below expectations, while capital expenditure plans for plant and equipment improved.
However, the net outcome for investment intentions for buildings and structures has remained subdued, albeit improving.
Similarly, although still negative, the net capacity utilisation indicator also strengthened.
Exceeding predictions, actual employment rose with the net indicator turning positive for the first time since the June quarter 2008.
Average selling prices have continued to fall although a turnaround is again predicted for the next three months.
While remaining well below the decade average, average unit costs rose modestly in line with prior expectations.
Australian Chamber of Commerce and Industry (ACCI) Director of Economics and Industry Policy, Greg Evans, says the outlook presented by the survey is solid but admits some key indicators have “remained mixed”.
“Economic activity has been strengthening but some fragile areas are still apparent. While general business confidence is well up with robust forward projections, the actual net outcomes for demand and production have softened during the quarter. Exports have also weakened,” Evans says.
“Despite the more positive headline survey results, we still consider there needs to be caution concerning a further tightening of monetary policy at this stage,” he says.
“There remains sufficient areas of weakness in actual conditions which may warrant a pause to assess progress in meeting stronger manufacturers’ expectations. This will also allow the opportunity to determine the strength of the wider economy upon the gradual withdrawal of stimulus.”
