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Export Expectations Positive Despite Sluggish Global Markets

Export Expectations Positive Despite Sluggish Global Markets

27th Jun 16

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Summary —

Results of the Australian Chamber-Westpac Survey of Industrial Trends have moderated for the June 2016 quarter as the nation heads into a federal election, and the modest uptrend in exports was broken in June with a net three per cent of firms reporting a decline. Expectations are for the uptrend to resume, supported by the lower Australian dollar but constrained by sluggish world growth.

Key Issues For The Dental Industry —

Each quarter, the Australian Chamber of Commerce & Industry (Australian Chamber) conducts the Australian Chamber-Westpac Survey of Industrial Trends, the most authoritative and longest running business survey in Australia, which focusses on Australia's manufacturing sector and has been tracking actual trends in the economy since 1966.

According to the survey, manufacturing is benefiting from a significant improvement in competitiveness flowing from the sharply lower Australian dollar, down twenty per cent against the US dollar since mid-2014. Even so, the cycle remains constrained. Consumer spending has gained momentum recently, but remains far from strong. A copy of the full survey results for the last quarter can be found here:

  Australian Chamber-Westpac Survey of Industrial Trends – June 2016


The Australian Chamber-Westpac Actual Composite index moderated in the June 2016 quarter to 55.1, down 6.3pts. This is still a positive reading, coming on the back of a particularly strong 61.4 in March 2016, to be more in line with the average for 2015 of 56.4. Some of the key findings are listed below:

  Actual composites index, seasonally adjusted —
This index moderated in the June 2016 quarter, to 55.1, down from 61.4 in March 2016, to be more in line with the 2015 average of 56.4. Strength remains evident across most components of the index, notably: new orders; output; and overtime; along with an emerging resilience in employment.
     
  Labour market composite —
The Australian Chamber-Westpac Labour Market Composite index moderated in the June 2016 quarter, to 54.6, down from 56.9 in March. The index is still at a relatively positive level, coming off a strong reading in June. In this cycle, the Labour Market Composite has once again proven itself to be a reliable lead indicator of economy wide jobs growth. This highlights the key linkages between manufacturing and the household sector.
     
  General business situation —
Results from the June 2016 quarter indicate that sentiment is positive in the Australian manufacturing sector. A net 18% of respondents expect the general business environment to strengthen over the next six months. That is broadly in line with March, +15%, and the 2015 average, +21%.
     
  Investment intentions —
Survey results showed that a net twenty-one per cent of respondents expect to increase spending on plant and equipment in the next twelve months. That is down from thirty-three per cent in March, which was one of the strongest readings in the history of the survey.
     
  Profit expectations —
Results from the survey indicated that a net nineteen per cent of respondents expect profitability to improve in the next twelve months.


Feedback from members of the Australian Dental Industry Association (ADIA), expressed through the ADIA Dental Products Business Conditions Survey, broadly reflect the same sentiments as the results of this most recent Australian Chamber survey. ADIA will continue to work in securing reforms necessary for the growth and sustainability of member businesses, and its advocacy in this area is strengthened through the strategic relationship with the Australian Chamber.

The 219th Australian Chamber-Westpac Survey of Industrial Trends was undertaken between 9 May 2016 and 6 June 2016. A total of 287 responses were received, and provided a reasonable cross–section of Australian manufacturing in respect of industry groups and size of operation. The next survey will be conducted over August / September 2016.
 

Currency of Information —

This update was issued on 27 June 2016 and please note that changes in circumstances after the publication of material or information may impact upon its accuracy and also change regulatory compliance obligations.

Disclaimer —

The statements, regulatory and technical information contained herein are believed to be accurate and are provided for information purposes only. Readers are responsible for assessing its relevance and verifying the accuracy of the content. To the fullest extent permitted by law, ADIA will not be liable for any loss, damage, cost or expense incurred in relation to or arising as a result of relying on the information presented here. 


This publication is available for your use under a Creative Commons Attribution 3.0 Australia licence, with the exception of the ADIA logo, other images and where otherwise stated. 

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