The Border Watch : April 8th 2014
Business Job ads on the improve SYDNEY: Job advertisements have continued to rise, suggesting stronger labour demand and improving conditions in the job market. Jobs ads rose 1.4 per cent in March, after a 4.7 per cent jump in February, according to ANZ’s monthly job ad series. Internet job ads rose 1.3 per cent while newspaper ads bounced 4.5 per cent. Advertising had risen for five consecutive months in trend terms, the report said. ANZ chief economist Ivan Colhoun said there was clearer evidence labour demand was strengthening. “Each of the main job ads/vacancies measures have risen this year, while some have been improving since the end of last year,” he said, adding advertising had strengthened in key industries, including construction, education and health. “This suggests the peak in the unemployment rate may be close, although the rate of improvement in job advertising does not suggest a rapid fall in the unemployment rate,” Mr Colhoun said. Children get more interest SYDNEY: Kids are getting better returns on their savings than their parents as banks scramble to secure customers from an early age. Children are being offered interest rates as high as 5.75 per cent per annum as the banks battle for new, young customers. The best interest rate for an adult online savings account is significantly lower, at 4.4 per cent. The youth saver market is becoming increasingly competitive as financial institutions try to gain customer loyalty from an early age, Canstar research analyst Lilith Bohler said. “While thrifty adults and self-funded retirees have to actively search for deposit products that will pay more than 4 per cent, cash-savvy kids have plenty of choices,” Ms Bohler said. China reforms ‘hold benefits’ World Bank flags potential financial advantages for Australia SYDNEY: China’s economic growth will slow slightly this year but the nation remains the key to the fortunes of the East Asia Pacific region, a new World Bank report says. Developing East Asia has been a global growth engine since the 2008 global financial crisis and remains the fastest-growing region in the world, the World Bank’s East Asia Pacific Economic Update says, with growth this year expected to be 7.1 per cent. China, the region’s biggest economy, will suffer an easing in its growth rate to 7.6 per cent this year, “Successful reforms in China could bring considerable benefits to trade partners.” down from 7.7 per cent in 2013, but economic reforms started by Chinese leaders late last year are expected to deliver sustainable growth in the longer term. While reforms in China’s financial and services sectors, as well as social policy improvements, are expected to further cut growth to 7.5 per cent in 2015, the World Bank has signalled potential benefits for Australia if efforts to move the economy to a more sustainable footing are successful. “Successful reforms in China could bring considerable benefits to trade partners supplying it with agricultural products, consumption goods and modern services,” the report, released yesterday, said. “Conversely, spillovers from a disorderly rebalancing in China could hurt regional and global growth, especially in countries relying on natural resource exports.” The World Bank said while South East Asian economies generally fared better than expected after the United States started to taper its fiscal stimulus program, structural reforms to maintain growth and boost investor confidence were needed. Improving economic conditions in Australia were a positive for Pacific Island nations, which conduct onethird of their total trade with Australia and New Zealand, the report added. AAP Jobless data might stop rate rise AAP CANBERRA: Difficult business conditions could push the jobless rate above government predictions to 6.5 per cent this year, a key business group has warned. As such, Australian Chamber of Commerce and Industry acting chief economist Burchell Wilson believes it is too early to completely rule out another interest rate cut. The chamber’s latest survey of investor confidence showed sales and profits remained weak in the first three months of this year, falling back towards a recent record low. Such trading conditions are undermining the willingness of business to invest and employ. “This challenges the view there is going to be an upswing in nonmining investment that will offset the downturn in the resources sector in the year ahead,” Mr Wilson said yesterday. AAP The business conditions index eased to 49 points in the March quarter from 50.6 points in the previous quarter – back below the important 50-mark that separates contraction from expansion. The survey’s employment index has been sub-50 since June 2010. “There is a risk we see Concerned: The Australian Chamber of Commerce and Industry’s acting chief economist Burchell Wilson speaks in Canberra yesterday. Picture: AAP in Brief Construction sector still in decline SYDNEY: Australia’s construction industry remains in decline but there are signs of improvement. The Australian Industry Group/Housing Industry Association Performance of Construction Index rose two points to 46.2 in March. The index remained below the 50 level that separates expansion from contraction but the rate of contraction was milder than in February. High costs weighing on Gorgon expansion PERTH: High labour costs could affect Chevron’s decision to push ahead with expansion plans for Gorgon, Australia’s largest gas project. The US energy giant, which is leading the massive Gorgon and Wheatstone liquefied natural gas projects in north Western Australia, said Gorgon was roughly 40 per cent more expensive than comparable projects in the Gulf of Mexico. Starpharma extends AstraZeneca deal MELBOURNE: Biotech Starpharma has expanded its agreement with AstraZeneca for the global pharmaceutical giant to use Starpharma’s dendrimer drug delivery technology in the development of new cancer treatments. Starpharma chief executive Dr Jackie Fairley said the agreement did not yet involve milestone payments to Starpharma but allowed the company’s technology to be applied to a broader range of drugs. Traveller numbers hit three-month low (unemployment) moving towards more like 6.5 per cent by the end of the year,” Mr Wilson said. This would be the highest in nearly 12 years and above the 6.25 per cent forecast by Treasury. Labour force figures for March are released on Thursday. Mr Wilson said the Reserve Bank may yet have to step in and cut the cash rate if the economy does not pan out as it hopes. “Growth remains below trend, the unemployment rate is rising, wages growth is moderating, so this isn’t really an environment in which we would necessarily expect to see expectations of a rate hike on the horizon,” he said. Wesfarmers to sell off insurance broker business SYDNEY: Wesfarmers will sell the rest of its insurance division in a deal worth $1.16 billion. The conglomerate will sell its insurance broking and premium funding business to US-based insurance broking giant Arthur J. Gallagher and Co. Under the deal, Wesfarmers will receive $1.01 billion for the business, as well as a distribution of about $150 million to repay funding for the operations. The sale will need approval from the Australian Foreign Investment Review Board, as well as regulators in New Zealand and the UK. The move follows the sale of 10 - The Border Watch, Tuesday, April 8, 2014 the company’s Australian and New Zealand underwriting businesses to Insurance Australia Group, which is still subject to regulatory approvals but has received the green light from the Australian Competition and Consumer Commission. If both sales go ahead, Wesfarmers will have received about $3 billion for its insurance division, which would be a pre-tax profit of up to $1.085 billion. Wesfarmers managing director Richard Goyder said the decision to sell the insurance business was consistent with the company’s focus on disciplined portfolio management. AAP SYDNEY: The number of Australian residents travelling overseas has fallen to a three-month low. There were 740,600 residents heading abroad in February for stays of a year or less, seasonally-adjusted figures from the Australian Bureau of Statistics showed. That was down by 1.4 per cent, or 10,300, from January and the lowest since November, but still up 44,900 on February last year. AAP Dollar closes higher on US jobs data BRISBANE: The Australian dollar is higher after disappointing US jobs data weakened the greenback. At the close yesterday, the local currency was trading at US92.84c, up from US92.36c on Friday. The Aussie dollar rallied after a US non-farm payrolls report fell short of high expectations on Friday.
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