The Australian economy is travelling well, according to data released yesterday ahead of today’s Reserve Bank board meeting and tomorrow’s third quarter economic growth data release.
Profits and sales were reasonably strong in the September quarter, along with wages and salaries, while some smart businesses trimmed their stocks of unsold goods rather than get caught with unsold product which would have to be sold off at a loss.
Jobs ads growth though remained slow last month, but car sales again rose.
Current account data and government financial figures, both for the September quarter, are out later today and will give us a further indication of just how strong third quarter economic growth was.
That’s after contradictory data yesterday on profits and inventories which suggest both strong growth, and growth not as strong as some analysts suspected.
Today’s current account data will be the key because while exports were up in the quarter, imports had a solid rise as well, according to the trade figures issued last month.
With boom in construction and resource investment, and solid growth in retail sales in the quarter, there could be growth from 0.9% in the quarter, to a high of 1.5%.
The strong rise in company gross operating profits of 4.8% in the quarter (and 8.8% in the 12 months to September), will be a major influence on the growth data, as will the 1.8% rise in wages and salaries (7.6% for the year to September).
But economists said the 1.1% fall in inventories in the quarter will detract from growth in the quarter. But how much is open to question.
That was after a revised 1.6% fall in the June quarter, which trimmed growth to 1.2%.
The original figure for the June quarter was a fall of 2.5%, but the revision upwards could impact the second quarter growth estimate in tomorrow’s release.
There was a notable fall in retail inventories on the quarter as shops cut their level of stocks in response to weak sales growth, especially in department stores.
Economists were expecting inventories to have risen by 1.2% in the September quarter.
The fall could be a small bullish point in that at some stage in the next few months, retailers and other businesses that have reduce their inventories will have to increase them if they are not to be caught short if economic growth strengths in early 2012.
The estimate of income from sales by manufacturers in the September quarter, in seasonally adjusted chain volume measures, was up 1.3% and the estimated income from sales by wholesalers in the September quarter in adjusted chain volumes measures was up 2.2%. Seasonally inventories were steady in the quarter for manufacturers.
In mining the ABS said gross operating profits rose a seasonally adjusted estimate 5.0%. "In current price terms, the trend estimate for wages and salaries rose 6.4% this quarter. The seasonally adjusted estimate rose 7.4%." Seasonally adjusted inventories in mining fell 0.6% in the quarter.
In manufacturing, company gross operating, seasonally adjusted, fell 3.0% in the quarter. "In current price terms, the trend estimate for wages and salaries rose 1.4% this quarter. The seasonally adjusted estimate rose 1.4%," according to the ABS.
Inventories held by wholesalers dropped 1.8% in the quarter, seasonally adjusted, and by 1.6% for retailers.
Retail gross company profits, seasonally adjusted, fell 2.9% in the quarter. In current price terms, the trend estimate for wages and salaries rose 1.0% this quarter. The seasonally adjusted estimate fell 0.9%.
Job ads were flat in November according to the latest report from the ANZ Bank yesterday.
That compares with a revised 0.6% fall in October to 181,461 (a fall of 0.7% originally).
Newspaper job ads were 0.6% higher in November, while internet job advertising was broadly unchanged.
Newspaper advertising is now 15.9% lower than a year ago, while internet advertising is 1.0% higher over the same period, in part reflecting the continuing trend towards advertising online.
Before yesterday’s release monthly job ads had weakened for six of the seven past months.
"The number of job advertisements was broadly unchanged in November compared to the previous month," according to the ANZ’s head of Australian economics and property research, Ivan Colhoun. "While the pace of monthly falls in trend job advertisements have slowed since June, November was the eighth consecutive month of trend decline.
"The negative trend in job advertisements points towards only modest employment gains for the Australian economy over coming months," he said.
"The Australian economy continues to experience large and conflicting cross currents," Mr Colhoun said.
"Mining and infrastructure investment is rising strongly at the same time as the global economic outlook has continued to deteriorate."
Newspaper jobs ads fell 2.9% in NSW, in November, seasonally adjusted, and by 1.7% in Victoria. But they were up 10.1% and 4.5% in WA.
In South Australia, seasonally adjusted newspaper ads fell 4.6%, while in Tasmania they ro
