Profits boom; wages...
A 30-second look at a few business indicators, ahead of the release of the national accounts tomorrow.
Strength in commodity prices saw annual mining company profits soar last year by 26 per cent, to a record $131 billion.
In turn total company profits tore higher by 10 per cent to some $354 billion, which is also a record high.
Great news for businesses, and for company tax receipts.
On the other hand, the figures for wages weren't quite so hot.
Indeed, if anything the growth in the total figure for wages and salaries paid indicated a possible loss of momentum towards the end of the year.
I'm not surprised, as plenty of other indicators suggested that the economy slowed badly in towards the end of the Royal Commission.
Inventories will also subtract a little from GDP. and overall a weak result should be expected.
The wrap
Even with the Federal budget steaming back towards surplus politicians appear to have become locked in an ideological battle for budget repair, so there's apparently little fiscal help coming.
Yesterday's monthly inflation gauge showed inflation - still - tracking way below target.
And today's performance of services index from AiG came in at just 44.5, for another very poor reading in February (a reading below 50 denotes contraction).
Westpac was already calling for two interest rate cuts this year (and yesterday Nomura also changed its view to forecast two further interest rate cuts).
The other major banks have yet to follow suit, but if they're as weak as many of the soft indicators suggest then tomorrow's national accounts for the December 2018 quarter will provide plenty more food for thought.
