Australian manufacturers are increasingly confident about profitability in 2017 and have “rebounded strongly” in recent months, according to a long-running quarterly survey.
The Australian Chamber-Westpac Survey of Industrial Trends had input from 304 manufacturers, and closed on September 2. The quarter saw an “above-par” reading in its Actual Composite Index, with “emerging resilience” in employment and “strength across new orders, output and overtime”, said Andrew Hanlan, Westpac’s senior economist.
“Manufacturing is benefitting from a strong upswing in new home building activity, although rates of growth have moderated, and a lift in renovation activity. It is also benefitting from a significant improvement in competitiveness flowing from the sharply lower currency, down 28 per cent against the US dollar since the 2013 peak,” he said in a statement.
Hanlan added that expectations were positive, though there were constraints in the form of weak world trade and a sharp downturn in mining investment.
“Businesses are looking to 2017 to be a positive year for profits, driven by rising turnover and a lower Australian dollar boosting export returns. A net 25 per cent expect profits to rise in the 12 months ahead,” he said.
The survey has been running since 1966.