Sunday, February 3, 2013

Poor Productivity Performance - Australia

The Business Council of Australia says the tapering mining boom meant the federal government had to continue making tough long term economic decisions despite setting an election date

Council president Tony Shepherd says he hopes the setting of September 14 as an election date did not mean there would be no reform for the next seven-and-a-half months.

Multi-factor productivity should be the number one priority and the government's first task should be getting modern workplaces for the future, he said.

Workplaces had to be adapted, flexible and relevant to the digital age and Australia's engagement with Asia.

"Workplaces that are focused on improving the productivity of people but that doesn't mean less pay for more work, that just means smarter work, more flexibility, more attuned to the demands of the economy," he told ABC TV's Inside Business.

"You've got to look at the causes of the poor productivity performance of Australia and address them and those things are taxation, regulation, workplace reform, infrastructure and skills and they are the priorities.

"But everything the government does should be looked at through the prism of does this improve our productivity, particularly given the fact that a lot of our sectors are battling against a very high Australian dollar which I think we are going to have for some time."

Shepherd said the enormous investment in resources had been masking low productivity and weakness in other sectors and as the boom tapers off, productivity had to improve or there would be real problems in resources, the rest of the economy and employment.


CNC Machining

Friday, February 1, 2013

Manufacturing Index - More Shrinkage

For 11 months now the Australian Industry Group Performance of Manufacturing Index (PMI) indicated shrinkage for the industry.

The seasonally-adjusted national composite index showed a result of 40.2 for January, down from December’s 44.3. A result below 50 indicates a contraction.

Every sub-sector experienced a decline except for wood and paper products, though the contraction for every sector except petroleum, coal, chemical and rubber eased.

"The well-entrenched pressures that have been confronting the manufacturing sector for several years are being compounded by a slowing in the broader economy,” said the Ai Group CEO Innes Willox in a statement.

“The extent of the contraction is reinforced by the ongoing contractions in January of the production, employment, new orders and exports sub-indicies of the Australian PMI®”

Respondents for the PMI survey listed soft demand and the high dollar as issues. The survey also noted that input costs and wages were up for January, while selling prices were down.

Bloomberg reports that the result is a 3 1/2 –year low for the industry, with the high dollar trumping any benefit that might have been experienced from lower interest rates. The Reserve bank cut rates when it met in December, but is not expected to do so again when it convenes on February 5, according to Dow Jones Newswires.



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