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5250.0 - Australian Business Expectations, Sep 1998 and Jun 1999  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 26/06/1998   
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MEDIA RELEASE

June 26, 1998
Embargoed: 11:30 AM (AEST)
68/1998

Business performance indicators weaker - ABS survey

The latest Business Expectations survey data released today by the Australian Bureau of Statistics indicate that all four business performance indicators are weaker than they were for the June quarter 1998.

In the September quarter 1998, businesses expect operating income and selling prices to rise (by 1.1 per cent and 0.2 per cent respectively) and profits and full time equivalent employment to fall (by 1.0 per cent and 0.7 per cent respectively). These are all declines in expectations over the previous quarter.

In the year to the June quarter 1999, businesses expect operating income, selling prices and profits to rise (by 2.7 per cent, 0.8 per cent and 13.1 per cent respectively) and full time equivalent employment to fall by 0.5 per cent. While the operating income, selling prices and profits expectations are similar to expectations last quarter, the latest employment expectation is weaker.

Expected falls in employment in both the short and medium term are the largest since late 1994.

The Mining, Electricity Gas and Water, and Construction industries expect the biggest falls in employment in the short term, expecting 1.7 per cent, 1.5 per cent and 1.4 per cent declines.

In the short term, small businesses appear less optimistic than larger businesses, expecting no change in their operating income and a 1.3 per cent increase in their operating expenses, leading to a 7.3 per cent decline in their profits. They also expect their full time equivalent employment to fall by 1.2 per cent, compared to a smaller 0.3 per cent fall expected by large businesses.

By comparison large businesses expect operating income, operating expenses and profits to rise by 2.3 per cent, 1.2 percent and 9.0 percent respectively.

Despite being more optimistic over the medium term than they are over the short term, small businesses are still not as optimistic as large businesses, expecting a lesser increase in their operating income and profits and a greater decrease in employment.

Small businesses expect operating income, operating expenses and profits to increase 1.6 per cent, 1.8 per cent and 2.9 per cent respectively while large businesses expect them to rise by 4.2 per cent, 1.9 per cent and 28.8 per cent respectively. Full time equivalent employment is expected to fall by 0.9 per cent for small businesses and 0.1 per cent for large businesses over the medium term.

Further details can be found in Australian Business Expectations, September Qtr 1998 & June Qtr 1999 (cat. no. 5250.0), available from ABS bookshops.

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