Firms more optimistic of 2004

  • Business
  • Wednesday, 02 Jun 2004

CANBERRA: Australia's economy grew more robustly than expected in the June quarter and businesses here were more optimistic about their performance next quarter, a quarterly survey of industrial trends showed yesterday. 

The Australian Chamber of Commerce and Industry (ACCI) and Westpac Banking Corp survey found business confidence rising, with 21% of respondents expecting improved business conditions in the next six months, up from 17%. 

Respondents' predictions for their own companies for the next quarter also strengthened, with the net outcome for profit expectations rising strongly to 27% from 18% in the last survey three months ago. 

ACCI chief executive Peter Hendy said this was a good result, stronger than in the previous quarters and well above expectations, with strong actual and predicted demand, production and employment outcomes. 

“All major indicators point to continued sustainable growth with relatively low inflation and a positive employment outlook,” Hendy said in a statement. 

The survey found the labour market remained tight in the June quarter with 18% reporting an increase in the numbers employed, down from 22%, while overtime worked rose very strongly to 13% from zero. 

Australia's unemployment rate has been stable at below 6% for eight months as a decade-long boom in housing created work in areas such as construction. 

The ACCI, Australia's largest business group with about 350,000 mainly small business members, said capacity usage remained at historically high levels and capital projections were solid. Export performance has strengthened. 

“While rising cost and price pressures are disappointing, they have been modest in relative terms,” Hendy said. 

Westpac senior economist Justin McCarthy said the latest survey indicated growth had actually accelerated in the June quarter while expectations of future activity were also upbeat, suggesting fears of a further economic slowdown were overstated. 

He said the export market appeared to be responding to strong global growth and a weaker Australian dollar. 

“This is a positive sign, providing an indication that the economy is making the transition to a more balanced growth path that incorporates slower domestic demand but an improving external sector,” McCarthy said in the statement. – Reuters  

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