Survey results reinforce need for policy certainty to boost business

11 Sep 2018 |

The 3rd quarter results of the Australian Chamber-Westpac Survey of Industrial trends, released today, show the outlook for Australian Manufacturing remains positive, but also sends a warning to Government about the urgent need for policy certainty, to give business the confidence to invest and create more jobs.

“The Westpac-AusChamber Actual Composite Index strengthened in September 2018, rising to 66.5 from 64.1 in June,” Westpac Senior Economist, Andrew Hanlan, said.

“This is a well above average reading for the index.

“Positive conditions reflect the boost to manufacturing from increased investment in state infrastructure projects as well as private commercial building. Notably, state governments continue to add new projects to the investment pipeline. A relatively low Australian dollar and robust global growth are also supporting exporters.

“The level of home-building activity is still high but is likely to weaken and consumer spending growth is currently a little below trend. A pressing negative is the continuing intense competition from offshore.

“The uptrend in exports has continued at a moderate pace after stumbling back in 2016.

“Expectations are positive, centered on new orders and output, as well as a renewed expansion in employment.

“The general business mood while optimistic is less upbeat than three months ago, slipping from a net 37% to a net 22%. There are some growing uncertainties, including rising global trade tensions and domestically potentially around public policy. Drought across much of the eastern states is concerning, with likely negative spill-over effects to manufacturing.

“The investment outlook for the sector is positive, in response to rising demand and improving profitability. A net 21% 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 robust jobs growth over the remainder of 2018 and into 2019. The index correctly foreshadowed the sharp acceleration in Australian employment through 2017, as well as a softer start to 2018.”

James Pearson, Chief Executive Officer of the Australian Chamber of Commerce and Industry, said:

“While we welcome the continued positive outlook for Australian industry, the weakening of business confidence over the last quarter is a timely reminder that business is not immune from the uncertainty generated by political turbulence.

“The government needs to boost business with positive policies that will encourage investment and risk-taking.

“However the Government’s decision to walk away from the National Energy Guarantee (NEG) without announcing long-term policies to encourage investment in energy supply leaves a policy void.

“We need to fill that void with policies to deliver short and long-term solutions to Australia’s energy crisis.

“Now is the time to bring forward the tax cuts for small, medium and family businesses with annual turnover of up to $50 million that have already been passed by Parliament.

“With global trade tensions on the rise and recent political instability at home, we need to re-build business confidence and make Australian firms more – not less – competitive. Australian jobs depend on it.

There were over 297 respondents to the Australian Chamber-Westpac Survey of Industrial Trends from across the manufacturing sector.

The survey, the longest-running business survey in Australia, dating from 1966, provides a timely update on the manufacturing sector and insights into economy-wide trends.

The survey results are available on the Australian Chamber Website.

The Australian Chamber of Commerce and Industry is Australia’s largest business representative group, its membership comprising over 80 State and Territory Chambers and Industry Associations covering all sectors of the economy.

Duncan Bremner

Director - Public Affairs and Advocacy

P  |  0448 822 666

E  |  [email protected]

P  |  0466 422 382

P  |  02 6249 6128

Want to hear more from us?

NewsletterMedia Releases