The outlook for Australian manufacturing continues to be positive, the Australian Chamber-Westpac Survey of Industrial Trends shows.
The December Quarter result, released today, shows continued solid output, backlog and new orders, while employment and overtime are expanding.
“The Westpac-AusChamber Actual Composite Index moderated in December 2017 to 63.4 from an elevated 66.1 in September,” Westpac Senior Economist Andrew Hanlan said.
“The robust level of December’s results reflect the boost from increased investment in both state infrastructure projects as well as private non-mining construction. A relatively low Australian dollar and global growth are also supporting exporters.
“The level of home-building activity is still high but is now turning lower. More pressing negatives are subdued consumer spending constrained by slow wage growth and continuing intensity from offshore competitors.
“Expectations, overall, are positive, centred on new orders and output as well as backlog and overtime. The survey result continues to reflect an upbeat mood.
“The uptrend in exports has continued at a moderate pace after stumbling in 2016.
“The investment outlook for the sector is positive in response to rising demand and consistent with a reduction in the sector’s spare capacity, as well as improving profitability. A net 15% of firms expect to increase equipment investment in the next year.
“The survey’s Labour Market Composite, which broadly tracks economy-wide jobs growth, points to continued solid jobs growth in the near term. The index correctly foreshadowed the acceleration in Australian employment through 2017.”
James Pearson, Chief Executive Officer of the Australian Chamber of Commerce and Industry, said: “The economy appears to be gaining momentum but there is a weak spot, consumer spending, which remains flat.
“Tax cuts, for individuals and businesses, would stimulate spending, investment and jobs growth, which will lead to higher wages. It will also help ensure Australian businesses remain competitive in the global arena.”
The survey results and report are available at the Australian Chamber website.
There were 264 respondents to the Australian Chamber-Westpac Survey of Industrial Trends from across the manufacturing sector. The survey was closed on December 4, 2017. Scores above 50 indicate positive responses outnumbered negative ones. The survey, Australia’s longest-running business survey, dating from 1966, provides a timely update on the manufacturing sector and insights into economy-wide trends.
The Australian Chamber of Commerce and Industry is Australia’s largest business representative group, its membership comprising the eight State and Territory Chambers of Commerce and 70 national industry associations covering all sections of the economy.