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5250.0 - Australian Business Expectations, Mar 2001 and Dec 2001  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 05/01/2001   
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MEDIA RELEASE

January 05, 2001
Embargoed: 11:30 AM (AEST)
02/2001

Businesses expect drop in operating income

Businesses are expecting a fall in operating income in the March quarter 2001. The expected decrease of 3.0% is the largest expected decrease since the commencement of the series by the Australian Bureau of Statistics (ABS) in the December quarter 1993.

Compared to previous surveys the overall outlook amongst the different industries is pessimistic in the short-term. The wholesale and retail industries are expecting the largest decreases in profit of 76.2% and 74.0% respectively. Only two industries, manufacturing and finance and insurance are not expecting falls in profit. Only the electricity, gas and water industry does not expect a fall in employment.

Small, medium and large businesses expect their profits to fall by 29.9%, 39.8% and 21.9% respectively.

Common reasons cited by business for the poor short-term outlook include tax changes, the exchange rate, fuel prices and the Olympics.

In the medium-term (December quarter 2001) the outlook is less pessimistic with businesses expecting increases in most indicators. However, in trend terms, these expectations continue to weaken for profit and operating income compared to recent quarters.

The extremes in the December quarter 2001 are reflected by the construction industry on one hand, expecting the largest decreases in operating income (1.5%) and profits (29.6%); and on the other by the electricity, gas & water industry expecting the largest increases in operating income (4.3%) and profits (22.0%).

All industries are expecting selling prices to increase in the medium-term.

Details are available in Australian Business Expectations March Qtr 2001 and December Qtr 2001 (cat. no. 5250.0) available from ABS bookshops. The key points from the publication and the full time series tables may be found on this web site.

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