Andrew Hanlan, Research Analyst at Westpac, notes that Australian Business Indicators survey’s March update was positive, providing upside surprises on profits and inventories.
Key Quotes
“This suggests that the risks to our Q1 GDP forecast of 0.9%qtr, 2.8%yr are tilted to the upside. On Tuesday, we receive updates on net exports and public demand ahead of the National Accounts on Wednesday.”
“Company profits were always likely to be relative upbeat early in 2018, with the mining sector receiving a boost from higher commodity prices and increased turnover.”
“Indeed, profits exceeded these already positive expectations, climbing 5.9% in the quarter vs market median and Westpac forecast of 3.0%.”
“Mining profits jumped 10.9% to be 4.4% above the level of a year ago.”
“The main surprise was non-mining profits, up 3.4%, with strength in the period evident in construction, manufacturing, retail, as well as a partial rebound in professional business services.”
“By industry, an inventory draw-down was evident in the mining sector to facilitate increased export shipments, but more than offsetting this was a sizeable increase in the wholesale sector.”
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