Business conditions have edged higher but a lack of jobs growth is likely to keep near-term activity fairly soft according to the NAB quarterly business survey published today.
Despite the recent improvement in conditions, which largely reflected strength in trading conditions rather than employment, the survey found “an economy that is fundamentally going sideways”.
The survey found confidence had slipped back and remained below trend, with a divide between the stronger mining and serviced-based sectors and the weaker consumer and trade dependant sectors, which remained a marked feature of the economy in early 2012.
Conditions were strongest in transport and utilities, mining and recreation and personal services, while they were weakest in manufacturing, retail and construction.
NBN to deliver additional $3 billion to Telstra
Telstra announced today that it expects to generate $2 to $3 billion in additional cash over the next three years as a result of its agreement with the Federal Government for the rollout of the national broadband network (NBN).
Telstra Corp advised shareholders that it does not expect to increase dividends until 2014, and that on market buy back would be inefficient at this time.
Chief executive David Thodey said the company has made no changes to guidance for the 2012 financial year, and that it still intends to pay a 28 cent per share fully-franked dividend in 2012 and 2013.
Australian sharemarket flat
The Australian sharemarket opened flat today as concern over the Eurozone resurfaced following news that Italy’s recession will be worse than expected and Spain’s bad loan ratio is at an 18-year high.
At the 10.15am official market opening, the benchmark S&P/ASX 200 index inched up 0.14% to 4,355.2 points and the broader All Ordinaries Index increased 0.12% to 4,432.8 points.
Gillard defends budget surplus and puts pressure on RBA to cut rates
Prime Minister Julia Gillard is defending the Labor Government’s determination to deliver a 2012/13 budget surplus at a business lunch in Perth today.
The Government has projected a surplus of around $1.5 billion in the next financial year, to meet its 2010 election promise to bring the Commonwealth balance sheet back into the black.
In her speech Gillard will also put pressure on the Reserve Bank of Australia to lower interest rates saying there is “plenty of room” for the central bank to cut its 4.25% cash rate.
“A surplus budget provides room for monetary policy,” Gillard will say.