Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)
The outlook for manufacturers remains largely upbeat with a strong global backdrop and a relatively low Australian dollar aiding exporters.
However, the latest Australian Chamber of Commerce and Industry-Westpac industrial trends survey does note some moderation in new orders in the first three months of 2018.
The survey’s composite index declined to 58.3 points in the March from 64.3 in the previous quarter but remains comfortably above to the 50-mark which separates expansion from contraction.
Overall, Westpac senior economist Andrew described it as a positive outlook “but the pace of growth has moderated”.
He said while the housing market is cooling, manufacturing is being boosted by investment in both state government infrastructure projects and private commercial building.
ACCI boss James Pearson said the survey also found manufacturers are expecting to pay higher wages over the coming period.
“That adds to evidence which is starting to build now of a pick-up, gradual but nevertheless a pick-up in the pace of wages growth,” he told reporters in Canberra on Tuesday.
However, he was concerned that businesses are less optimistic about being able to remain profitable in the next six-to-12 months.
“Businesses can’t sustain wage growth unless they can sustain their profitability,” he warned.
He said the cost of energy remains a number one concern among businesses but he also urged the federal parliament to back the remainder of the government’s company tax cut plan.