Alan Oster
Alan Oster
australian conditions continues december driven economy improved performing point reasonably reinforce report results trading
While the Australian economy continues to report sub-trend growth, the December results reinforce the point that it is still performing reasonably well. Conditions improved in December, driven by stronger-than-expected trading and profitability.
again businesses capital cash companies continue employment firmly future hold official outcomes rate report spending weaker
Businesses continue to look at the future with some skepticism. Companies again report weaker employment outcomes in December, while capital spending also weakened somewhat. The official cash rate is even more firmly on hold for the foreseeable future.
against both business continuing equipment falling parts poor report retail strength wholesale
There was continuing strength in mining, equipment manufacturing, nonresidential construction and utilities, ... Against that, residential construction, parts of agriculture and both wholesale and retail report poor and falling business conditions.
bring cash increased official percent rate
Overall, we still see the official cash rate being increased by around 1.25 percent in total, bring the rate back to around 5.5 percent by mid/early 2003.
activity bank both continuing demand domestic economic inflation next outlook pace reserve watching
The pace of economic activity is continuing to moderate. The Reserve Bank is very much on hold, watching both the inflation outlook and domestic demand over the remainder of 2005 and well into next year.
activity business concerns continued fall future potential sharp
Business concerns about the potential for a sharp fall in future activity have continued to ease.
direction either engage main message might monetary moving occasional policy prospect
While the RBA might engage in occasional bouts of jawboning, we see little prospect of the RBA moving in either direction for some considerable period. That, indeed, was the main message out of yesterday's monetary policy statement.
australian benefit capacity dollar export growth increased lower offset partly partner sustained trading volumes
On the other hand, export volumes benefit from increased capacity and a lower Australian dollar partly offset by some moderation, but sustained trading partner growth during 2006-2007.
bank boom both conditions continuing domestic inflation mining outlook reserve strong watching
The story is one of continuing boom conditions in mining and very strong nonresidential construction activity. The Reserve Bank is still very much on hold, watching both the inflation outlook and domestic demand.
continued costs doubt few higher impact oil prices reflecting
On transport, it is one of the few sectors that has continued to deteriorate through the quarter, no doubt reflecting the impact of higher oil prices on costs and profitability.
against cost oil pressures prices remain
Against that, cost pressures and more specifically oil prices remain a concern, as does the availability of suitable labor.
business confidence despite increase reasonable reluctant results suggest
Despite improvements in confidence and still reasonable sales, the results suggest that business is still reluctant to increase hiring.
economic growth points quarter survey
In summary, the survey points to a significant pick-up in economic growth in the first quarter of 2006.
capacity case current economy environment headed high labor levels might needs operating rate stressed tight
It needs to be stressed that the case (for a rate hike) is not about current levels of wage/price pressures, but where they might be headed in an environment of an economy operating at high levels of capacity and in a very tight labor market.