Print sales fall but profits rise in 2006

Industry sales improved by 1.3 per cent compared to September 2006, but when compared to the same period 12 months earlier were lower by 1.6 per cent. Despite this lower result the industry reported a surprising lift in pre-tax profits up by 5.9 per cent over last year.

Printing Industries National Policy and Research Manager, Hagop Tchamkertenian, said while it was encouraging to see the industry growing once again trading conditions continue to remain challenging.
"While the reported improvements in industry growth are a welcome development I am still concerned that both the economic data and other data such as industry sales figures are showing that the industry is still below the level that it was 12 months ago," he said.

Activity is still locked into the cyclical nature of the industry with the first two quarters bereft of decent results, and most of the work coming in from July to December. However historical trends show the printing industry is still tracking the overall economy fairly closely.

"While at the Australian economy level growth picked up during the December quarter, the modest nature of growth should ease concerns about the prospects of another hike in interest rates. Retail trade activity, which is an important consumer of printed matter, has continued to grow despite the interest rate rises of last year,” he said.

“While we talk about changing industry dynamics it is good to see that current economic growth trends continue to mirror historical trends," he said.

The national accounts data show that the Australian economy recorded growth of 0.6 per cent during the December quarter resulting in an annual growth rate trend of 2.4 per cent. Household consumption along with government expenditure and investment in housing kept the economy ticking over, but the key indices of exports and business investment made no contribution to growth.

On a trend basis, payment to employees increased by 1.9 per cent during the quarter and by 7.3 per cent during the year to December. The private sector gross operating surplus increased by 3.2 per cent during the quarter and by 10.5 per cent for the year to December.

The wages share of the economy remained stable at 53.7 cent while the profit share increased from 27.4 per cent to 27.7 per cent. Import penetration stood at 35.9 per cent up from the 35.2 per cent level recorded for the same period a year earlier.

Among the states and territories - Western Australia reported the highest growth rate with annual growth running at 7.2 per cent in trend terms followed by Australian Capital Territory 6.5 per cent; Queensland 6.1 per cent; Victoria 3.2 per cent; South Australia 2.6 per cent; New South Wales 1.4 per cent; and Northern Territory 1.0 per cent. Tasmania recorded economic decline of 3.0 per cent.

At a broad industry level mining, manufacturing, construction, transport and storage, finance and insurance, property and business services, ownership of dwellings were all reported to have made positive contributions to growth. Detracting from growth was the agriculture sector.