BUSINESS NEWS

RBA HOLDS AT 5.5%
The Board of the Reserve Bank of Australia has held firm with the basic cash interest rate remaining at 5.5 percent for the third consecutive month.

AUSTRALIAN ECONOMY SNAPSHOT
An overview of the national economy shows an overall slowdown being the combination of the conflicting good and bad surveys and statistics. Leading the charge on the plus side is the motor industry with record sales for the 17th straight month.

The Australian Institute of Management's salary survey confirms a 4 percent rise over the last 12 months, wages continued to rise driven by skills shortages that is expected to continue with the current growth at around 5 percent. The ANZ Jobs Survey shows a 7 percent reduction in newspaper adverts for May while the jobs advertised on the internet were up 4 percent; the 3 percent difference is thought to represent the true level of the jobs decline.

The precise nature of the general economic slowdown is indicated by the Westpac Economic Activity survey, which showed a 0.2 percent dip. The joint Westpac-Melbourne Institute's latest index also showed around the same reduction and predictions are that it could hit zero the end of the year.

Official government figures show the country’s economic growth has rebounded from the zero earlier this year to now stand at an annual rate of 2 percent. Company profits for the first quarter show nearly a 2 percent drop. The reasons include reduced consumer and retail spending, housing coming off the boil and the continued rise in business stock levels. Many surveys are now showing the only bright spot on the hope horizon are the tax cuts.

On the gloomy side, trading figures continue to blow out with the total debt having now reached an all-time record 7 percent of GDP and annual productivity rate has slumped to the lowest for nearly 20 years. The consensus of many economists says the Australian economy could be in for the slowdown we had to have.

BUSINESS OUTLOOK

CHEAPEST SUPER FUNDS
Leading industry superannuation funds continue the battle with their commercial counterparts with the latest episode concerning the $19 million advertising campaign. It followed complaints to ASIC from the commercial operators about advertised claims of industry funds being cheapest due to low costs and fees. The regulator agreed the ads were misleading and the campaign has been suspended.

HOT AND HOTTER
One of the hottest remaining areas of the Australian economy is commercial construction. Figures show a lift of 10 percent in large construction projects. Analysts say a number of large resource projects and their additional infrastructure facilities are boosting the figures to above normal healthy growth for this sector.

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