5676.0 - Business Indicators, Australia, Dec 2004

ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 28/02/2005

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Main Features
About this Release

DECEMBER KEY FIGURES

			Sep Qtr 04 to Dec Qtr 04	Dec Qtr 03 to Dec Qtr 04
			%	%

Sales of goods & services (Chain vol. meas.)
	Manufacturing
		Trend	-0.9	-0.9
		Seasonally Adjusted	-1.5	-1.5
	Wholesale trade
		Trend	0.2	5.1
		Seasonally Adjusted	0.5	5.6
Inventories (Chain vol. meas.)
	Trend		0.2	3.6
	Seasonally Adjusted		-0.3	3.8
Company profits before income tax
	Trend		7.3	20.6
	Seasonally Adjusted		1.3	11.7
Company gross operating profits
	Trend		2.5	13.1
	Seasonally Adjusted		0.3	10.5
Wages and salaries
	Seasonally Adjusted		1.4	6.2

Inventories (volume terms), Trend estimates - Quarterly change
Graph: Inventories (volume terms)

Company gross operating profits (current prices), Trend estimates - Quarterly change
Graph: Company gross operating profits

DECEMBER KEY POINTS

CHAIN VOLUME MEASURES

The trend estimate for inventories increased by 0.2% this quarter, which was less than the growth of between 0.7% and 1.8% in the previous seven quarters. The seasonally adjusted estimate fell by 0.3% compared with the 0.4% increase last quarter.
The trend estimate for Manufacturing sales of goods and services (down 0.9%) fell for the third successive quarter. It fell 1.5% in seasonally adjusted terms. The trend estimate of Wholesale trade's sales of goods and services continued the growth since March quarter 2001, with a seasonally adjusted increase of 0.5% this quarter.

CURRENT PRICE ESTIMATES

While the trend estimate for company gross operating profits continued the steady growth of recent quarters, the seasonally adjusted estimate increased only slightly (by 0.3%) this quarter.
Growth in the trend estimate for wages and salaries was slightly lower than in the past two quarters than was the case through 2003-04. The seasonally adjusted estimate grew by 1.4% this quarter.

NOTES

CHANGES IN THIS ISSUE

There are no changes to this issue.

COMPARISON BETWEEN COMPANY GROSS OPERATING PROFITS AND GROSS OPERATING SURPLUS

While price changes have had a significant impact on the value of inventories held by Australian businesses this quarter, this impact is less than was the case last quarter. An inventories valuation adjustment (IVA) is applied to the gross operating surplus of private non-financial corporations (GOS) estimate in the Australian National Accounts. As prices for inventories have risen by less in the December quarter than in the September quarter, growth in GOS will be higher after the application of the IVA. The IVA for the December quarter is $1,537m, which is $437m lower than September quarter IVA of $1,974m. No adjustment is made to the company gross operating profits (CGOP) estimate in this publication and, as a result, users should exercise caution when comparing the two series.

It should also be noted that there are other significant differences between the two series. In particular, changes are made to GOS when annual benchmarks are applied and slightly different seasonal factors apply to the two series. Given this, while CGOP movements are an appropriate indicator for GOS, it is not the case that the two series will have equivalent seasonally adjusted movements from quarter to quarter.

REVISIONS IN THIS ISSUE

As is usually the case after the initial release of a quarter's estimates, revisions have been made to the September quarter 2004 estimates as a result of responses received or revised after the publication of the previous issue and the use of concurrent seasonal adjustment methodology. The net effect on September quarter 2004 estimates of these revisions has been to revise the seasonally adjusted chain volume estimates for Manufacturing sales of goods and services by 0.1% and wholesale trade sales of goods and services by -0.1%. The seasonally adjusted chain volume measure for total inventories has not been revised. Seasonally adjusted current price estimates of wages and salaries have been revised by 0.1 % and company gross operating profits by -0.2%.

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or David Coxall on Sydney (02) 9268 4241.

ANALYSIS BY INDUSTRY

FEATURED SERIES

The following graphs and commentary refer to seasonally adjusted and trend estimates of: sales of goods and services ('Sales') and inventories ('Inv.') in volume terms; and wages and salaries ('Wages') and company gross operating profits ('CGOP') in current price terms.

TOTAL ALL INDUSTRIES

The trend estimate for total company gross operating profits has being growing since September quarter 2001, with growth of over 2% in each of the past four quarters. The seasonally adjusted estimate has levelled off this quarter after two quarters of strong growth. Both the trend and seasonally adjusted estimates for wages and salaries increased by 1% in the latest quarter, continuing the increases experienced in each quarter since each series began in March quarter 2001.

Graph: Total All Industries - CGOP and Wages

The trend estimate for total inventories increased slightly in the latest quarter. While Retail trade has been the main contibutor to this increase it has been offset by decreases in Mining and Manufacturing. The seasonally adjusted estimate decreased slightly in the latest quarter following sustained growth since March quarter 2003.

Graph: Total All Industries - Inventories

MINING

The trend estimate for company gross operating profits has increased strongly - by between 5% and 10% - in each of the latest four quarters after decreasing significantly in the previous four quarters. The seasonally adjusted estimate has levelled off this quarter after growing very strongly in the previous two quarters. The trend estimate for wages and salaries has increased by 2% this quarter, continuing the increases since the series began in March quarter 2001. After increasing strongly in the past three quarters, the seasonally adjusted estimate has increased by just 1% this quarter.

The trend estimate for sales of goods and services has decreased slightly for the third successive quarter. The seasonally adjusted estimate has decreased by 2% in the latest quarter following decreases in the previous two quarters. The trend estimate for inventories has decreased in the latest three quarters following a build up in the previous three quarters. The seasonally adjusted estimate fell slightly this quarter.

MANUFACTURING

The trend estimate for company gross operating profits was relatively flat this quarter after increases in the previous five quarters. The seasonally adjusted estimate decreased by 5% this quarter, the first decrease since June quarter 2003. The trend estimate for wages and salaries increased slightly this quarter, continuing the increases since the series began in March quarter 2001. The seasonally adjusted estimate fell slightly this quarter after four quarters of growth.

Both the trend and seasonally adjusted estimate for sales of goods and services have declined slightly over the past three quarters. The trend estimate for inventories fell by 1% in each of the past three quarters, with the seasonally adjusted estimate also falling by 1% in each of the past two quarters.

Graph: Manufacturing - Inventories and Sales

CONSTRUCTION

The trend estimate for company gross operating profits has increased by 2% in the latest quarter, continuing the increases since September quarter 2003. The seasonally adjusted estimate has increased slightly for the past two quarters. The trend estimate for wages and salaries has decreased slightly in each of the latest four quarters following steady growth in the previous eight quarters. The seasonally adjusted estimate decreased by 2% this quarter following an increase of 1% in the previous quarter.

The trend estimate for sales of goods and services has been declining for the past six quarters, decreasing by 3% during the period. The seasonally adjusted estimate decreased by 1% this quarter.

WHOLESALE TRADE

The trend estimate for company gross operating profits has increased by a small amount in each of the past six quarters. The seasonally adjusted estimate rose by 4% this quarter after decreases in each of the two previous quarters. Both the trend and seasonally adjusted estimates for wages and salaries have increased steadily in recent quarters.

While trend estimates for sales of goods and services have continued to increase, growth rates have fallen over the past four quarters. This quarter's seasonally adjusted estimate increased by 1% after a slight downturn the previous quarter. The trend estimate for inventories increased slightly this quarter after stronger growth in each of the past eight quarters. This quarter's seasonally adjusted estimate decreased, the first fall since December quarter 2001.

Graph: Wholesale Trade - Inventories and Sales

RETAIL TRADE

The trend estimate for company gross operating profits have been growing for the past eight quarters, with this quarter's increase being the smallest over that period. The seasonally adjusted estimate fell by 16% after a rise of 26% last quarter. The trend estimates for wages and salaries have been increasing by 2% for each of the past five quarters. The seasonally adjusted estimate has also been growing steadily for some time.

Trend estimates for sales of goods and services have increased by between 1% and 2% in each of the past eight quarters. The seasonally adjusted estimate fell by 1% this quarter after increases in each of the previous three quarters. Trend estimates of inventories have increased over the last four quarters, with a 1% seasonally adjusted increase this quarter.

Graph: Retail Trade - Inventories and Sales

TRANSPORT AND STORAGE

The trend estimate for company gross operating profits has fallen for the second successive quarter after five quarters of growth. The seasonally adjusted estimate rose by 10% after falling 22% the previous quarter. Trend estimates for wages and salaries have increased by between 2% and 3% in each of the past six quarters following an extended period of weaker growth. The seasonally adjusted estimate increased by 1% this quarter.

Graph: Transport and Storage - CGOP and Wages

The trend estimate for sales of goods and services fell for the second successive quarter. The seasonally adjusted fell marginally this quarter after a 1% decrease last quarter.

PROPERTY AND BUSINESS SERVICES

The trend estimate for company gross operating profits continued to grow slowly, with growth in each of the past five quarters being below 2%. The seasonally adjusted estimate decreased by 2% this quarter after two quarters of growth. The trend estimate for wages and salaries has been increasing steadily with increases between 1% and 2% in each of the past eight quarters, with the seasonally adjusted estimate increasing by 2% this quarter.

Graph: Property and Business Services - CGOP and Wages

Trend estimates of sales of goods and services have been growing constantly over the past seven quarters, with growth in each of the past three quarters being very slight. The seasonally adjusted estimate fell by 1% this quarter following increases in the two previous quarters.

Graph: Property and Business Services - Sales