Australia | Dec 18 2007
By Rudi Filapek-Vandyck
The 185th Westpac-ACCI Survey of Industrial Trends has revealed conditions in the Australian manufacturing sector remained strong in the December quarter. The economists involved comment that given the strong historical performance of the Composite Indexes in leading overall economic activity one can only conclude that this survey points to strong growth, rising inflation and further tightening labour markets.
According to Westpac and ACCI, around 76% of the Survey responses were received after the November 24 election and there can be little doubt the new Australian government is likely to be well pleased with the healthy rise in the Expected Composite Index and the outlook for the general business situation.
The outlook for the business situation in the next six months jumped to a net balance of 22 from 5 in Q3 – the highest read for the Index since 2002Q1.
While the current Composite Index fell slightly from 56.4 to 55.8, the economists comment this index remains well above the decade average of 52.8.
The economists state the ongoing strength of the Current Composite points to a maintenance of strong domestic conditions through 2008.
Westpac’s Labour Market Composite Index was also higher. The Composite jumped 2 points from 12 to 14 – the highest since 2004Q4. According to the economists, the Index has provided a reliable guide to major trends in the overall growth of employment in the economy. The Index implies a reacceleration of employment growth to 3% or more in 2008H1.
More headaches for the RBA?