Fed: New survey shows more businesses tip profit falls

AAP General News (Australia)
12-05-2000
Fed: New survey shows more businesses tip profit falls

CANBERRA, Dec 5 AAP - One in three businesses expected profits to fall in the three
months to December, with high fuel prices, interest rates, and the weak currency taking
its toll, a new survey has shown.

The Australian Chamber of Commerce and Industry (ACCI) and Westpac survey showed business
confidence fell sharply in the December quarter.

It showed the number of businesses expecting a fall in profits outnumbered those expecting
higher returns for the first time in almost 10 years.

Thirty per cent tipped a fall compared to the 20 per cent of the previous quarter,
while the proportion expecting increased profits fell from 33 to 27 per cent.

Production was also down, and the proportion of businesses citing a lack of new orders
as the main reason grew from 59 per cent to 71 per cent.

But the survey also showed export growth was expected to remain strong, taking advantage
of the lower Aussie dollar.

ACCI chief executive Mark Paterson said the results were disappointing although conditions
were expected to improve next year.

"Concerns about higher interest rates, high petrol prices and the weak exchange rate
and distortions to spending patterns in the wake of the GST and the Olympics have seriously
affected business confidence and the actual performance," he said.

AAP kmh/daw/mg/br

KEYWORD: INDUSTRY

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