Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
This week’s national accounts are gearing up to show another solid economic growth result at the tail end of 2020, as new figures point to further employment gains in coming months.
Job advertising surged 7.2 per cent in February, following an upwardly revised 2.6 per cent increase in January.
It lifted the annual rate of the ANZ job ads series to 13.4 per cent, the highest level since 2018.
“The ongoing strength in ANZ job ads gives us confidence that we’ll see solid net employment gains continue over February and March at least, and that the impact of the end of JobKeeper in March will be mitigated to some extent,” ANZ senior economist Catherine Birch said.
Treasurer Josh Frydenberg is committed to ending the JobKeeper wage subsidy in March as planned, but has said other support measures are being considered for industries still in need, such as aviation.
However, the gradual winding back of the JobKeeper wage subsidy saw company profits drop by 6.6 per cent in the December quarter, but they were still 15.1 per cent up on the year.
While weaker than forecasts, the Australian Bureau of Statistics data also showed the company wage bill rose by a solid 1.4 per cent, while business inventories – stock on shelves and in warehouses – are expected to contribute to Wednesday’s economic growth result in the national accounts.
At this stage, economists are forecasting that the economy grew by around 2.5 per cent in the December quarter, although they will finalise their expectations after Tuesday’s international trade and government spending figures.
This builds on the huge 3.3 per cent rebound in the previous three months after collapsing seven per cent in the June quarter as a result of the COVID-19 pandemic, which marked the first recession since the early 1990s.
Even so, the Reserve Bank is widely expected to leave the cash rate and other key measures unchanged at a record low 0.1 per cent when its board meets on Tuesday.
Manufacturers are enjoying their strongest performance in three years, buoyed by the solid economic recovery from last year’s recession.
The Australian Industry Group performance of manufacturing index grew a further 3.5 points in February to 58.8, its strongest expansion since March 2018.
Ai Group chief executive Innes Willox said manufacturers lifted production and employment in February as sales recovered a large share of the ground lost in 2020.
“Manufacturers are generally positive about the outlook for the next few months with new orders coming in at a greater pace as restrictions on activity and cross-border travel are hopefully wound back,” he said.