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Strong manufacturing gives hope for sector in wake of Toyota shock Strong manufacturing gives hope for sector in wake of Toyota shock
(31 minutes later)
Toyota may be closing but Australia’s manufacturing sector has helped boost the country’s economic outlook with a surprisingly strong turnaround in January.Toyota may be closing but Australia’s manufacturing sector has helped boost the country’s economic outlook with a surprisingly strong turnaround in January.
Business conditions have risen to close to a three-year Business conditions have risen to close to a three-year
high, a private survey showedd on Tuesday, while business confidence is up for the high, a private survey showed on Tuesday, while business confidence is up for the
first time in four months.first time in four months.
January’s sharp fall in the dollar helped manufacturing conditions recorded a surprisingly strong January’s sharp fall in the dollar helped manufacturing conditions recorded a surprisingly strong
turnaround for the month, the National Australia Bank’s monthly business turnaround for the month, the National Australia Bank’s monthly business
survey of more than 400 firms has found.survey of more than 400 firms has found.
The news had the effect of pushing the dollar back up through US90 cents as it continued its recent rally. The Aussie was worth US90.07 cents in afternoon trading on tuesday. The news had the effect of pushing the dollar back up through US90 cents as it continued its February rally. The Aussie was worth US90.07 cents in afternoon trading on Tuesday.
The NAB survey shows business conditions maintained December’s The NAB survey shows business conditions maintained December’s
momentum, rising one point to four, the best since March 2011 and close momentum, rising one point to four, the best since March 2011 and close
to their long-run average.to their long-run average.
Confidence is up two points to eight, and is above its long-run average. It also is generally positive across all states.Confidence is up two points to eight, and is above its long-run average. It also is generally positive across all states.
“Now that conditions are on the rise, confidence may continue its“Now that conditions are on the rise, confidence may continue its
run of surprising (post-election) resilience for a while longer,” NAB run of surprising (post-election) resilience for a while longer,” NAB
said on Tuesday.said on Tuesday.
“Confidence is now positive for most industries, although “Confidence is now positive for most industries, although
wholesale (a bellwether industry) and mining are both negative – significant given the increased importance of mining to the Australian wholesale (a bellwether industry) and mining are both negative – significant given the increased importance of mining to the Australian
economy.”economy.”
Conditions appear to have turned around due to low interest rates and a depreciating Australian dollar, the NAB said.Conditions appear to have turned around due to low interest rates and a depreciating Australian dollar, the NAB said.
Inflation pressures remained subdued, but were building on the back of rising costs while labour costs growth was restrained.Inflation pressures remained subdued, but were building on the back of rising costs while labour costs growth was restrained.
The announcement that Toyota is closing its Australian operations by 2017 will cast doubt on the country’s ability to maintain its manufacturing base.
The mixed picture for the sector was underlined on Tuesday when Graincorp said it would slash 130 jobs and close its Murarrie plant in
Brisbane as it shifts its food manufacturing operations to Victoria.
The grains marketer plans to inject $125 million into its edible
oils manufacturing operations and relocate its food operations in
Murarrie to Numurkah and West Footscray.