2006 Growth Rate Possibly Around 3.5%

LATEST AUSTRALIAN BUSINESS NEWS

Earlier this week we reported on the slow down in building activity and it being a possible indicator of a greater slow down in the Australian economy. However, as can only be expected, there is often other economic data that supports a slightly counter view.

The Westpac Bank and The Melbourne Institute’s combined economic survey (which is widely and credibly accepted) indicates that the Australian economy will continue to grow at a slightly lower pace than expected in 2005, but will not deteriorate further in 2006. This data indicates that Australia’s 15 years of economic growth is set to continue – not at a significant pace – but at a highly respectable 3 – 3.5%.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

david.taylor@agarcarlyon.com

Australian Prime Minister Pushes Trade While in DC

LATEST AUSTRALIAN BUSINESS NEWS

The Australian Prime Minister, John Howard (pictured) is currently in the USA and amongst other issues, has been pushing the USA to implement reform in agricultural trade. Australia is urging the US to follow through on the undertakings recently given by President George Bush to remove US farm subsidies. As well, the Prime Minister has spoken at length on the USA/Australia Free Trade Agreement.

In his speech to the American Australian Association of the US Chamber of Commerce in Washington DC on 18 July, Mr Howard said that “the Free Trade Agreement represents an expression of optimism about the future of that (USA and Australia) relationship. Of course it didn’t provide the two sides with everything they wanted, but what it has done and what the subsequent passage of the E-3 visa legislation, which I particularly want to express my thanks to the American Congress for, what it’s done is to say to the rest of the world that there is a special character to this relationship. And as our economy and yours becomes more enmeshed as the years go by, particularly in the service sector, people will look back on the passage of this Free Trade Agreement and remark at what a remarkable, far-sighted contribution it’s made to relations between the two countries.”

“But that Free Trade Agreement will only be fully exploited and fully developed if the economies of our two countries continue to grow, and if successive governments in Australia and the United States continue to rise to the challenge of economic reform. The Australian economy is now enjoying its fifteenth year of expansion. That hasn’t happened by accident. It’s happened because over the years governments of both political persuasions in Australia, and I have never been reluctant to give credit to former governments in Australia for some of the reforms carried out in the 1980’s, because governments of both political persuasions in Australia have undertaken far-reaching and significant economic reforms. Tariff reform; getting the budget back into balance and surplus; which has been a hallmark of the work carried out by my government, particularly the contribution that my Treasurer, Peter Costello, has made to that process; labour market reform, and I will return to that again in a moment; fundamental taxation reform some five years ago; and, of course, importantly, financial deregulation carried out by the former government, but strongly supported by the then coalition opposition.” To read the Prime Minister's full address click here.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

david.taylor@agarcarlyon.com

Economy Shows Signs of Slowing

LATEST AUSTRALIAN BUSINESS NEWS

Regrettably, the latest data from the Australian Bureau of Statistics (ABS), indicates a decline in growth for the state of New South Wales (NSW), of which Sydney is the capital. The ABS reports that the trend in building activity figures estimates that the total value of work done is now showing four quarters of decline. This compares unfavourably with the growth shown in the state of Queensland (QLD) - of which Brisbane is the capital - which has had two consecutive quarters of growth and with Western Australia (WA) - of which Perth is the capital - having had six consecutive quarters of growth.

The NSW Opposition party’s Shadow Treasurer, Ms Peta Seaton said that the figures continue to make a mockery of the government’s statement that “the NSW economy will accelerate a notch, reflecting the beginnings of a recovery in the housing sector."

Even though Sydney is regarded as the world’s best city (see the article below) – that is not enough to justify a business case for establishing a business presence for the long term. There is now greater reason for overseas businesses seeking a key site for establishing their Australian headquarters to consider cities other than Sydney. Many in the businesses community are lobbying the NSW Government to reactivate incentive programs to encourage businesses to locate in the state, rather than seeking locations where lower business taxes apply.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

david.taylor@agarcarlyon.com

Sydney - the World's Best City - Again

LATEST AUSTRALIAN BUSINESS NEWS

Sydney has again been named the world’s best city in a survey of wealthy US travellers undertaken by “Travel & Leisure” magazine. The survey was carried out over 900,000 subscribers to the magazine and is the eighth time Sydney has come out as the world’s best city since the magazine started the award 10 years ago.

Tourism is a big money spinner for the local Sydney economy, bringing in around $23 billion a year.

The award is a fitting tribute to Sydney, which has capitalised on the success of holding “the best ever” Olympic Games in 2000 and the millions of dollars it has recently spent on a new international advertising campaign.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

david.taylor@agarcarlyon.com

Debate on Workplace Reform Heats Up

LATEST AUSTRALIAN BUSINESS NEWS

The debate within the Australian community on likely changes to the current industrial relations system is now increasing. The Howard Federal government has made it well known that it intends to make use of its majority in both Houses of Parliament to enact changes to the workplace relations laws to ensure that small businesses in Australia in particular are not hamstrung by rules and regulations that are more suited to larger corporations.

Even though the precise nature of the proposed changes are not yet clear, the union movement has commenced a nation wide television advertising campaign that has ensured that the issue is now at the forefront of media comment.

Companies considering entering the Australian business environment should ensure that they are fully aware of the current debate on workplace reform to reassure themselves that their business planning is based on what could be new legislation by about September this year. There is no doubt that the changes will bring additional benefits to employers. To read an 11 July speech by Prime Minister John Howard on his proposed reforms – click here.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

david.taylor@agarcarlyon.com

Possible Qantas and Singapore Airlines Merger

LATEST AUSTRALIAN BUSINESS NEWS

Comment is often made in regard to the difficulty in buying seats on the Pacific air route. This route is serviced by only two airlines, Qantas and United. Both tourists and business people have for some years experienced difficulty in obtaining flights that suit their schedule due to this prevailing duopoly.

As well, on a $ per mile flown basis the west coast USA /east coast Australia flights are some of the most expensive in the world. There is of course a good argument that increased competition would lower prices. Qantas regularly refutes this and argues that increased competition would force it to significantly cut staff and therefore reduce services.

Singapore Airlines has made a number of approaches to the Australian government in attempt to gain rights to fly the Pacific route – thereby opening up not only many hundreds more seats each week but also opening up the route to greater competition and thus lower prices. The beneficial flow on effect to tourism and business is obvious. Regrettably, last month the Australian government rejected the approach by Singapore Airlines and again rejected their bid to fly Sydney – Los Angeles.

As a result, over the last week there has been speculation that Singapore Airlines might try and wrest away from Qantas the stake held in the airline by British Airways and become, itself a major shareholder in Qantas, or indeed undertake a merger. Speculation is that both the Australian and Singaporean governments are supporting this move. It should of course be noted that Singapore Airlines is a government owned airline – Qantas is not. If talks continue as is rumoured, then both US and Australian businesses should soon benefit from more capacity on the Pacific route. Tourism in Australia would most likely be the major winner.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

david.taylor@agarcarlyon.com

Facts on Export Growth

LATEST AUSTRALIAN BUSINESS NEWS

We previously reported that Australia’s exports grew by two per cent to reach $14.7 billion in May, achieving a new record high for the second consecutive month. Exports are now on track to reach record levels in both value and volume terms in 2004-05. In the 11 months to May 2005, exports totalled $148 billion, up 13.6 per cent compared to the eleven months to May 2004. Readers of these daily reports should be interested to know that export growth was driven by higher exports of non-monetary gold, and continued growth in coal exports (up five per cent) following the introduction of higher contract prices in April. Other mineral fuels also displayed robust growth.

Rural exports rose $8 million in May. Growth in meat and meat preparations and other rural exports led the way. Some manufactured goods exports recorded sizable increases in May, including road vehicles and medicinal and pharmaceutical products. Services exports rose one per cent, driven by growth in travel and other services.

Those overseas businesses locating offices in Australia to service their Asian markets should note that merchandise exports to East Asian markets have grown exceptionally strongly in 2004-05. Over the 11 months to May 2005, merchandise exports to China have grown 31 per cent, to Japan 26 per cent, to Thailand 61 per cent and to India 22 per cent. There has also been solid growth in merchandise exports to other major markets, including the United States, the European Union and New Zealand.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

david.taylor@agarcarlyon.com">editor@agarcarlyon.com

Unemployment Hits 29 Year Low

LATEST AUSTRALIAN BUSINESS NEWS

Contrary to the expectations for the coming 12 months - unemployment levels in Australia have reached a 29 year low, with the release of the latest unemploment figures. Today, the Australian Bureau of Statistics (ABS) released its data for June, that indicates that unemployment levels are now at just 5%.

The rate in May was 5.1% The participation rate has also increased by 0.2% to 64.7% when compared to May's rate. The lowest rate in the country is in Western Australia, where the unemployment rate now stands at 4.6%. The traditional "engine house" of the Australian economy, the state of New South Wales, has unemployment just above the national figure at 5.1%.

Commentators had been expecting a rise in unemployment to reflect the slight cooling off of the Australian economy that is currently being experienced.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David
editor@agarcarlyon.com

Interest Rates Stay Steady

LATEST AUSTRALIAN BUSINESS NEWS

As expected, the Reserve Bank of Australia (RBA) has kept official interest rates on hold again this month. In an announcement this morning, the RBA said that the official cash rate would remain at 5.5%. Most commentators expect the next move in rates to be downward, but for this not to occur until later in 2006.

This will most likely be the time when the Australian economy will be experiencing some flattening out and slower growth than has been experienced over the past years as higher fuel prices bite hard and inflation stays near the upper limit of the RBA's target range of 2% to 3%.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David
editor@agarcarlyon.com

Wine Exports Show Steady Growth

LATEST AUSTRALIAN BUSINESS NEWS

Australian wines have enjoyed steady export sales over the past 16 years and the trend looks like it will continue. Sales of Australian wines overseas hit 100 million litres in 1992/3 rising to a high of 584 million litres by last year.

Last year's sales alone were a 12.7% increase on sales for 2002/3. The Australian Bureau of Statistics released the latest data today, showing the rapid and continuing growth of Australian wine sales overseas.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

editor@agarcarlyon.com

Is Australia Heading for its 15th Year of Growth?

LATEST AUSTRALIAN BUSINESS NEWS

There is some concern today that the Australian economy over the next 12 months might not have the same strength in growth as it has experienced over the past year. The Australian financial year runs from 1 July to 30 June, so there is now plenty of speculation as to what the forthcoming year holds. The question on all commentators’ lips is will the Australian economy enjoy a 15^th year of growth in 2005/06?

Yesterday the latest balance of trade figures again showed that Australia was importing more goods and services than it was exporting. Its major import market is the USA with Japan still its major export market. The trade deficit though shrank when compared to the two prior months but a 2% increase in ex ports was equally offset by a 2% rise in imports.

Inflation is stable at 2.7%. This is a figure that is probably a little higher than the government would like. The target rate is between 2% and 3%.

Even though the housing sector is in a slight decline with mortgage sales down more than 9% last month, other areas of the economy show resilience – for instance the employment market is the best it has been for over 20 years. Unemployment is currently at 5.3%.

The Reserve Bank of Australia (RBA) will release its latest view on interest rates tomorrow – it is expected that there will be no change.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

editor@agarcarlyon.com

Brisbane Airport - World's Best

LATEST AUSTRALIAN BUSINESS NEWS

July 4^th – not a holiday in Australia of course - but one that I was able to celebrate on board the aircraft carrier USS Kitty Hawk yesterday. The ship arrived in Sydney yesterday and hosted a function on board to celebrate Independence Day. The carrier is impressive to say the least.

But back to business.

Brisbane Airport has been recognised as the world’s most efficient and customer focused privatised airport by the International Air Transport Association (IATA). Brisbane Airport Corporation (BAC) was awarded an IATA Eagle at the 61st IATA Annual General Meeting in Tokyo in “special recognition of outstanding performance in customer satisfaction, cost-efficiency and continuous improvements.’’ The IATA Eagle Awards are presented annually to recognise airport and air navigation service infrastructure providers who provide value for money and quality service to their airline customers. They also acknowledge the positive steps being taken by airports and air navigation services to control infrastructure costs and related charges.

More than 15 million passengers now travel through Brisbane Airport every year with more and more airlines choosing to fly from Brisbane.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

editor@agarcarlyon.com

Australian Workforce Shows Stability

LATEST AUSTRALIAN BUSINESS NEWS

The latest workforce data to be issued from the Australian Bureau of Statistics (ABS) shows that the Australian workforce is quite stable – an issue of importance to businesses considering taking up opportunities in Australia either from start-up or as a joint venture.

• Of all the employed persons aged 15 years and over, 24% had been with their employer or business for more than 10 years.
• Approximately one in four (24%) employed persons worked 45 hours or more in their main job in the reference week. Of these, 35% were owner managers.
• Nearly all (90%) of employed persons in November 2004 expected to be with their current employer or business in 12 months time.
• Of the employees who said they worked on a contract basis, 19% worked in the property and business services industry and 18% worked in education. Almost one-third (31%) of employees who said they worked on a contract basis were Professionals.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

editor@agarcarlyon.com

Lights Without Electricity

LATEST AUSTRALIAN BUSINESS NEWS

Melbourne-based Luna Glow has just developed the world’s first screen printed sign that emits light without electricity enabling people to escape life threatening situations. Australian entrepreneur John Clear, joined forces with eminent American electrical engineer Jim Smith and founded Luna Glow in 2000 after developing a range of the world’s foremost performance photoluminescence technology.

Mr Clear said their environmentally friendly, non-electric after dark products that allow people to locate important escape routes in emergencies are making it big internationally, and are especially seeking markets in the USA. Their products go into stairwells, carparks and underground areas. What’s driving demand in the US market is the need to make people and buildings safer.

When the lights go out, the Lumenite® light sleeves automatically and immediately “kick in” to emit instant illumination for eight to 10 hours. Luna Glow’s products can be put into any plastic material and mixed with all types of chemicals, to create an endless range of “glow in the dark” products. Their new oversized EXIT screen-printed sign can be used for many purposes including for buildings, stadiums and larger warehouses.

For information on this article, or on any other aspect of the Australian economy or business opportunities available, please email me.

David

editor@agarcarlyon.com