The Australian economy expanded by less than expected during the December quarter, according to the latest figures from the Australian Bureau of Statistics.
The figures show GDP grew by just 0.4%, on a seasonally adjusted basis. In the 12 months to December, GDP rose by 2.3%, seasonally adjusted.
This figure comes after the ABS recorded growth of 0.8% in the September quarter.
Economists had largely expected GDP growth to be 0.7% in the December quarter, with a 2.3% rise through 2011.
The administrators of Queensland-based electronic retailer Wow Sight and Sound have announced that all 15 of the company’s stores will close, just over a week after the company announced it had been placed in administration.
Ferrier Hodgson said in a statement the closures will result in 580 job losses.
Receiver and partner Stewart McCallum said in a statement redundant staff would be paid their salaries, but other employee entitlements will not be paid until the realisation of group business assets has concluded.
The announcement continues the ongoing trend of retailing decline in Australia, where more than 500 store closures have been announced.
Telstra has completed its $11 billion deal with the Federal Government for the construction of the National Broadband Network that will see the company hand over some of its infrastructure.
“Today, we have concluded almost three years of intense and complex negotiations, with multiple parties, and we are very pleased we have delivered this positive outcome for our customers, employees and shareholders,” Telstra chief executive David Thodey said in a statement.
“The agreements are expected to also contribute to free cashflow generated in the medium term, provide us with greater financial flexibility and a stronger balance sheet, and help to offset the decline in free cashflow expected as customers migrate onto the NBN,” Thodey said.
The announcement comes after the ACCC accepted Telstra’s structural separation undertakings.
Construction activity has slipped for a 21st consecutive month, with commercial and apartment building sliding last month.
The Australian Industry Group-Housing Industry Association’s performance of construction index (PCI) dropped 4.2 points to 35.6 in February – well below the 50 point mark separating contraction from expansion.
“The tentative signs of recovery that had emerged in the closing months of 2011 as interest rates were lowered, appear to have dissipated since the start of this year,” Ai Group director of public policy Peter Burn said.
“With new orders also weak in February and with market interest rates now somewhat higher, the outlook for the next few months remains flat, particularly for commercial and residential construction.”
The Australian sharemarket has followed overseas stock markets lower this morning, amid fears of a Eurozone recession and concerns about the outlook over this week’s Greece debt swap.
Sentiment has also been weakened by forecasts of sub-8% growth in China.
The S&P/ASX200 was down 1.1% to 4158.5 at 1130 and the All Ordinaries index was down 1.1% to 4247.3.
The Australian dollar was also weaker following the worse-than-expected gross domestic product figures released this morning.
The Reserve Bank says out-of-cycle rate rises by the banks do not “undermine the transmission mechanism of monetary policy.”
“It certainly throws sand in the wheels of the transmission mechanism, but there are other things that throw sand in the wheels as well,” RBA deputy governor Philip Lowe said.
“But we are confident that changes in the cash rate remain a very important influence.”
“In setting monetary policy, we take account of what is going on with lending rates.”
The comment follows a halt in the official cash rate at 4.25%, with Bank of Queensland quickly moving to increase its rates by 10 basis points.
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
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