Petrol, wages cloud outlook… Boomers on the job… SMEs get audit relief, miss FTA benefits… Rudd commits on greenhouse… Fast food fats… Economy roundup
Tuesday, March 13, 2007/
Petrol and wages make for mixed outlook
Petrol prices and wage costs remain a key concern for business owners, according to two major business surveys released today.
Today’s Dun & Bradstreet Business Expectations Survey for the June 2007 quarter shows recent petrol prices costs remain a top worry despite recent price falls.
More than half the 1200 business owners and managers surveyed said petrol price costs are their main concern for the June quarter; just 19% said falling petrol prices are having a positive cost impact, down from 51% in November and 31% in December.
Twenty-eight percent of respondents expect June 2007 quarterly profits to be down, slightly more than the 26% figure a year earlier, but more expect prices and sales to increase, suggesting some inflationary pressure in the economy.
Business reported a generally positive trading environment in the NAB Monthly Business Survey for February 2007, but 1.4% wage growth for the month, which annualizes to 5.25%, remains a worry.
The number of respondents that reported no change in their confidence for the month ahead increased from 44% to 55%, fewer while the number expecting an improvement in conditions decreased from 36% to 28%. Profitability and trading expectations remained largely unchanged.
The mining, finance and business services sectors reported the strongest business conditions and retailing, manufacturing and wholesaling the worst, suggesting the sectoral divide in economic conditions also continues.
– Mike Preston
Baby boomers shun retirement
Can’t find workers? Think again. Baby boomers have broken the habit of early retirement and are willing and available.
Latest figures from the National Centre for Social and Economic Modelling, shows a huge leap in the number of mature people staying on in the workforce, either working for others or running their own businesses. And although many start their own businesses (men more than women), it also shows a changing attitude of employers, who are willing to hire and retain older workers.
But there is a large divide between married workers and unmarried workers.
The AMP/NATSEM report shows that 59% of married men aged between 60 and 64 are still working, compared to 49% in 2001. Co-author Ann Harding says the figures are not so good for unmarried older males, with those in the labor force moving from 28% to 43%. “It is the same trends for those men in their late fifties,” she says.
“It’s the women who are really going gangbusters,” she says. About 32% of unmarried women between 60 and 64 are now working compared to 23% in 2001. As for married women, 37% now work compared to 28% six years ago.
“We expect these trends to continue, with more older people remaining in the workforce for longer,” she says.
The survey also showed that the baby boomers are richer than previously thought with those aged 45–64 controlling half of the nation’s total household wealth. The richest quartile of the baby boomers has an average net worth of $910,400– while the poorest has $68,300.
– Amanda Gome
Audit relief for SMEs
SMEs may soon be able to avoid audits, in favour of less expensive “reviews” if measures canvassed by a new Auditing and Assurance Standards Board discussion paper are implemented.
The suggestion in the Auditing Small and Medium Sized Enterprises discussion paper is the first step towards a two-tier audit standard system. But the paper points out that a review would provide a lower level of assurance.
The discussion paper follows the release of exposure draft by the International Accounting Standards Board containing new standards expected to reduce the volume of accounting guidelines applicable to SMEs.
Sue Prestney, a principal of MGI Boyd Chartered Accountants and a spokeswoman for the Institute of Chartered Accountants, welcomed the possibility. “Audits can be time-consuming for business owners and costly in terms of the staff time needed to make the accounting information available and answer queries – not to mention there will be someone sitting in their office diverting staff attention from what they usually do,” she says.
Submissions in response to the Auditing and Assurance Standards Board discussion paper can be made until April 30.
– Mike Preston
SMEs missing out on FTA benefits
On the eve of the next round of free trade agreements, research has revealed that 79% of small-business exporters claim they experience no noticeable benefits of an FTA.
A survey of 300 companies found that almost a quarter feel that FTAs shows bias towards partner nations and favor large corporations. Almost half are unaware of the current FTA negotiations and 39% are not aware of Australia’s current trade deals.
The DHL survey also shows that 82% say that FTAs do not influence their decision when selecting an export destination. However, 78% feel they provide positive benefits for international trade and overall benefits for industry.
Rudd’s greenhouse target
Opposition Leader Kevin Rudd has vowed that a federal Labor government would cut carbon emissions by 60% by 2050. Rudd hasn’t specified how he would achieve the target and whether his government would compensate coal-fired power generators forced to close.
Labor is aiming to have clean coal technology operational by 2020 and has reaffirmed $500 million fund to develop technologies such as carbon capture and storage. Prime Minister John Howard has no emission reduction target, but he is likely to have the power industry behind him as he argues that a 60% emission cut is more than the country can afford.
– Jacqui Walker
Fast food industry under pressure
Fast food chains feeling the heat from concerned consumers and the government have voluntarily agreed to reduce the amount of trans fats in their products. At an industry forum in Sydney called by the Federal Government, McDonald’s, KFC, Krispy Kreme, Pizza Hut, Subway and Hungry Jack’s agreed to meet in September to formulate a plan.
Trans fat makes food taste better and last longer but increases the amount of “bad” cholesterol in the body. The World Health Organization recommends trans fats be no more than 1% of a person’s daily kilojoule intake.
– Jacqui Walker
More than 216,000 jobs were advertised in February, up 3.4% on January and 24.8% on a year earlier, according to the ANZ Jobs Advertisement report released today.
The strong result suggests wage pressures are likely to grow as the economy runs up against employment capacity constraints.
On the stockmarket, the S&P/ASX 200 was down 0.24% to 5877.1 points at midday today, while the Australian dollar had edged up to US78.54¢ from US78.13¢ at close yesterday.
Government figures released yesterday show China’s monthly trade surplus was $US23.8 billion in February, driven by the country’s fastest increase in exports in 12 years.
Japan’s economy grew at an annualised rate of 5.5% in the December 2006 quarter, its fastest growth rate in three years.
– Mike Preston