A survey conducted by the Australian Chamber of Commerce and Industry (ACCI) in partnership with Westpac found that the manufacturing sector’s optimism has grown in the second quarter of 2019.
By the end of the June quarter, 28 per cent of the 240 survey respondents expected their businesses to improve in the next six months, while at the end of the March quarter, only 12 per cent felt similarly positive.
This shift in sentiment follows the recent federal election, as well as the results of the NSW state election.
Manufacturers included in the survey also expected their companies to be busier in the second half of the year, with 36 per cent expecting orders to rise in the June quarter. In the previous quarter, only 25 per cent forecast such a rise in orders.
Overall sentiment stayed relatively stable at 61.5 per cent, down from 61.8 per cent in March, yet this was the softest since late 2016.
Westpac senior economist, Andrew Hanlan, highlighted how the manufacturing sector was impacted by a diverse set of circumstances.
“The manufacturing sector is being impacted by cross-currents. The housing downturn and spillovers from the drought are clear negatives. Countering this is the boost from the lower Australian dollar and from the upswing in public infrastructure investment,” said Hanlan.
Other factors that respondents indicated could positively impact the health of the sector for the rest of 2019 were further cuts to interest rates and income tax. Due to this, firms expected rates of equipment spending to increase, with 21 per cent indicating they planned to raise their spending amount, a rise on the 12 per cent in March.
“We encourage the Government to work with business to improve productivity, ease cost pressures and build business confidence to invest and create more jobs for the benefit of all Australians,” said ACCI CEO James Pearson.