The National’s excellent economic
team has somewhat changed its tune toward Henry’s view of a stronger
economy. But its overall summary is: “Business conditions in June
remain broadly unchanged – around the surprisingly high levels reported
in May.”

  • Stronger trading conditions offset by falls in profitability and employment.
  • Business confidence also Broadly unchanged – albeit at much lower levels.
  • Other key measures also similar to May – new orders down while capacity utilisation up a bit.
  • Non-residential construction and retailing contributing most to recent strength.
  • Wage pressures broadly unchanged – but slowing in annual rate terms.
  • Price pressures – especially retail – continue to Increase.
  • National’s growth forecasts unchanged – 2% for 2004/05 and 2.75% in 2005/06.
  • RBA still firmly on hold – we also still favour a cash rate cut in early 2006.
  • But risks rising, that if growth stronger, this cut may not eventuate.

Read more here.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.

 

Peter Fray
Editor-in-chief of Crikey

JOIN NOW