Economy

Company profits higher than expected in March; Budget dampens latest manufacturing index: Midday Roundup

Engel Schmidl /

Gross operating profits of Australian companies grew by a seasonally adjusted rate of 3.1% in the March quarter, slightly ahead of economists’ expectations, reports Business Spectator.

It’s a better result than the December quarter, when company profits rose by 1.7%.

Data released today by the Australian Bureau of Statistics also revealed company profits increased by 10.9% in the 12 months to March 2014, just a touch ahead of the 10.7% rise between December 2012 and December 2013.

Business inventories fell 1.7% in the March quarter, in seasonally adjusted chain volume terms, and income from sales by manufacturers fell at the same rate.

Budget dampens manufacturing index

The Australian manufacturing industry is still struggling according to the latest Australian Industry Group Australian Performance of Manufacturing Index released this morning.

Although manufacturing improved by 4.4 index points to 49.2 in May, with improvements in production and new orders, the sector fell short of the 50 point expansion level.

Australian Industry Group chief executive Innes Willox says the Federal Budget has had a negative impact on the report’s results.

“While there was an encouraging rebound in new orders after a particularly weak April, the public reaction to the Federal Budget appears to be weighing negatively on consumer sentiment and business confidence,” says Willox.

“The ongoing uncertainty over a number of budget measures is adding another layer of concern for local manufacturers,” he says.

Shares up on open

Aussie shares have opened slightly higher this morning, as investors keep their eyes on mining stocks amid continuing downward pressure on the price of iron ore.

The S&P/ASX200 benchmark was up 12.8 points to 5505.3 points at 11.54am AEST. On Friday, the Dow Jones closed 18.43 points higher, up 0.11% to 16717.2 points.

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