Mixed Economic Indicators to Prod RBA for a Rate Hold
Australia's business environment has so far sustained its growth pace, expectedly on the back of the ongoing mining boom, but national data also indicated that regions and business sectors were hardly benefitting from the resources boost.
Basing on the fresh numbers released by the Australian Bureau of Statistics (ABS), a deep wedge now exists between business sectors and regions in the country, with high improvements posted in the mining regions of Western Australia, Queensland and the Northern Territory.
These economic areas, the ABS said, enjoy a host of business related benefits - from sales growth that jumped by 14.6 percent in the past 12 months leading to December 2011 salary increases that peaked to a high of 10.9 percent over the same period.
The southeast regions, which comprised of New South Wales, Victoria, South Australia, the ACT and Tasmania, on the other hand on recorded sales spikes of 2.9 percent and wage climbs of five percent last year, highlighting the great divide that has characterised the Australian economy in the past few years.
The ABS reported too that companies barely managed to collect profits in the past year, losing in that department by up to 6.5 percent in the December quarter and en route to a measly yearly average of 2.1 percent profit growth over the past 12 months.
Analysts noted that the 2011 profit performance was so far the worst showing for Australia's businesses, eclipsed only by the profits slide of 13.7 percent in 2009 during the worst period of the global financial crisis.
The year 2011 also marked the year that mining profits tumbled by nine percent and the manufacturing sector registered sinking profits of up to five percent in the year while the financial, insurance and other services reported plunging returns of up to 50 percent in the year.
Boosts, however, were seen in the administrative and support sector, which registered growths of 12 percent while profits in the utilities sector surged by five percent in the year, the ABS said.
Amidst the contraction seen last month in the services sector, national inventories output soared by 1.4 percent in the past year, again led by the mining sector, and enough to fuel salary hikes of 0.8 percent in the last quarter.
And despite the pre-announced job cuts in the banking industry, the ANZ reported that job ads index posted improvements of 3.3 percent in February but last month's figures actually represented slides from the January job ads surge of 7.5 percent.
Reserve Bank of Australia (RBA) governor Glenn Stevens had acknowledged last month that there exist some "'very disparate and very powerful forces," in the domestic economy dynamics that monetary policy cannot solve.
"Monetary policy is a national policy. We have one instrument - one currency. We are a currency area and we cannot make the differences go away," Stevens was reported by BusinessDay as saying during his appearance before the Parliament in February.
Economic indicators so far in effect have convinced many economists that the RBA board will again opt for a rate pause this month, sustaining the decision it issued last month following the series of rate cutbacks that the central bank issued late last year.