Aussie Manufacturers Feeling Optimistic
Latest statistics from Westpac show that it takes more than a pandemic to stop Aussie businesses!
The Australian Chamber-Westpac SurveyofIndustrial Trends show Australian industry is expecting demand and orders to improve significantly this year, encouraging businessesto boost output.
“Manufacturers are telling us that they’re optimistic at this point, and expecting demand to go up, particularly as household consumption climbs,” ACCI CEO James Pearson said.
“Gathering momentum in the housing sector in response to low interest rates and the Home Builder scheme is playing a key part.
Demand for Aussie Products
“We also know that Australian businesses and consumers are looking to support Australian companies and source Australian made products as much as possible, in light of trade restrictions and supply chain disruptions.
“To be sustainable, our recovery must be based on more than pent-up domestic demand aided by government stimulus. In 2021 we need to re-open our international borders in a safe and controlled way to accelerate the trade engine that drives much of the Australian economy; we need to follow through on industrial relations reform to make it easier to hire people and create jobs; and we need to tackle tax reform to reward aspiration and incentivise investment and entrepreneurism.
”Westpac Senior Economist Andrew Hanlan said:“The survey reports activity conditions improved in the final quarter of 2020 as the economy reopened following the shock of COVID-19.
“The Wespac-AusChamber Actual Composite lifted to 48.4 in the December quarter, up from 42.8 in the September quarter. This recovery follows the dramatic fall to 24.0 in the June quarter associated with the initial lockdown and the response to COVID.
Turnaround in Profit Expectations
“With the activity index nearing 50 in the December quarter, this suggests conditions are stabilising in the manufacturing sector. Respondents are upbeat about prospects for their own businesses. The Expected Composite leapt to 69.1 in December from 46.1 in September, eclipsing the highs seen during the rebounds that followed previous downturns.
“The December survey saw a turnaround in profit expectations, with a net 23 per centof firms expecting profitability to improve in coming months. Investment plans have also improved, with a net 26 per centof firms planning to increase equipment investment in the coming year.
“As to employment prospects for the manufacturing sector, a net 16 per centof respondents intend on expanding their workforce this year in response to the burst of new orders. This is a turnaround from the experience through much of 2020 when staffing levels declined in the face of falling activity.”