Business conditions ease, but wages still high: NAB survey
Business confidence hit a 12-month low in December 2006, a National Australia Bank report released today shows. The decline did little to slow wages growth.
Very weak figures in the retail and wholesale sectors were chiefly responsible for the drop in business trading and profitability levels.
The trade and profitability figures, combined with a fall in new orders and interest rate speculation at the time, contributed to business confidence hitting its lowest level for 2006.
Despite all the bad news, wages growth continued to surge ahead, leaving wages up 5% for the year.
The NAB report predicts that interest rates will stay put over 2007, with the economy to continue to grow at a slow but steady 2.25%.
By Mike Preston
Asia strong in good year for tourism
Tourism in Australia may be struggling, but worldwide there are more travellers than ever before.
Global tourist numbers reached their highest level ever in 2006, with Asia posting strong 7.6% growth, rebounding decisively from the December 2004 tsunami, according to the United Nations World Tourism Organisation.
There were 842 million tourist arrivals in 2006, up 4.5% on the previous year. The growth is mainly thanks to the recovery of Asia and increased popularity of Africa as a holiday destination.
Sub-Saharan Africa was the fastest growing tourist destination with a 9.4% increase in tourism numbers, while France, Spain and China were the three most popular countries.
The report predicts China will overtake Spain as the second most popular tourist destination within the next five years.
Overall, world tourism is predicted to grow by 4% in 2007.
By Mike Preston
Optus 3G network on the way to regional and rural areas
Mobile phone users in regional areas are set to benefit after Optus announced plans to expand the coverage of its 3G mobile network.
The move could mean cheaper third generation mobile phone services for regional businesses that at present have no choice but to use Telstra’s Next G network.
Optus will spend $800 million to build the regional network, which will start going live in regional centres from April.
Optus chief executive Paul O’Sullivan says the new network would bring “competition and improved products and services to customers” in regional areas.
For the many businesses that rely on the interactivity that 3G mobile phone services afford, Optus’s decision to break Telstra’s monopoly in regional areas, and the prospect of the wider service options it presents, will be welcome.
By Mike Preston
Economic roundup
Strong economic signs from the US continue to have a dampening effect on the Australian dollar, which closed down at 77.29 US cents last night.
The benchmark ASX 200 reached a closing record high of 5812.5 points.
Meanwhile, everyone is waiting for today’s interest rate announcement (US time) from the US Federal Reserve. Pundits widely predict that Fed Governor Ben Bernanke will leave the 5.25% US federal funds rate unchanged.
By Mike Preston
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