Wednesday, March 14, 2012

There are more than two Australias: Victoria heads south

A stark divide has opened up in business conditions with Western Australia way out in front, every other state well back, and Victoria at the bottom of the pack.

The February NAB survey shows conditions improving everywhere but Victoria where they slipped to the lowest level on the mainland.

Western Australia now boasts a business conditions index of +13 meaning positive reports from businesses far outweigh negative reports.

In second place, way behind, is NSW with an index of +3, meaning positive responses only just outweigh negative responses. South Australia and Queensland each record near-neutral readings of +1, and Victoria a reading of zero.

The national business conditions index is positive at +3 is positive, but below its long-run average of +6.

Victoria also lags the nation on business confidence, recording a reading of -2.

Western Australia is the leader, with a confidence index of +13, followed by NSW with +5. Every state other than Victoria has confidence in positive territory...

Transport & utilities is the strongest sector with an conditions index of +24, followed by recreation and personal services at +19. Manufacturing and retail are the weakest, at -7 and -14.

The survey finds wage pressure confined to mining with overall wages climbing at a “subdued” 0.9 per cent per quarter while mining wages climb 2.2 per cent.

Price inflation is close to zero with the businesses surveyed reporting price rises of 0.2 per cent per quarter, but purchasing prices are rising strongly climbing 0.7 per cent per quarter.

Employment conditions are improving in transport & utilities and the wholesale sector while deteriorating in retail and construction.

Forward orders are strongest in mining and weakest in retail, manufacturing and construction.

Half of all businesses surveyed said they didn’t need credit, up from 38 per cent a year ago.

Separate January housing finance figures released yesterday confirm a geographical divide. New loans for owner occupation climbed a seasonally adjusted 3.8 per cent in Western Australia and just 0.9 per cent in Victoria.

NSW commitments dived 6.3 per cent in the aftermath of the rush of first home buyers at the end of last year attempting to take advantage of stamp duty concessions before they were wound back on January 1.

The size of the average home loan fell to $291,300, down 2.3 per cent on a year earlier.

The average NSW loan was $324,900, the average Victorian loan $295,800, and the average West Australian loan not too far behind at $268,200.

In today's Sydney Morning Herald


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