The national accounts data shows that the printing industry grew by a robust 2.1 per cent during the March 2007 quarter. Compared to the same period a year earlier printing industry economic growth was up by 5.0 per cent on trend basis.
The ABS data also shows that the printing industry recorded the second highest growth rate among the manufacturing sectors for both the March quarter and for the year to March and was also among the star performers of the Australian economy. The data on economic growth comes two days after the release of sales and profit data which confirmed trading conditions improved during the March quarter.
Figures released last Thursday for new capital expenditure show the moderating trend in capital expenditure for non-mining based sectors. In seasonally adjusted terms sales were reported to have increased by 14.5 per cent during the March quarter compared to the December quarter. Compared to March quarter 2006, sales were 19.9 per cent higher during the 2007 quarter.
During the 12 months to March 2007 printing, publishing and recorded media industry sales totalled almost $18.6bn, an increase of 3.5 per cent on the same period a year earlier. The profitability situation was also reported to have significantly improved during the March quarter to the tune of 51.1 per cent on the outcome of the December 2006 quarter.
Compared to the same period 12 months earlier, printing industry pre-tax profits were reported to have improved by 73.4 per cent. For the 12 months to March 2007, the industry's pre-tax profits improved by 9.0 per cent to total almost $2.3bn.
New capital expenditure data shows that there has been a fifth consecutive quarter decline in the printing, publishing and recorded media sector. The March 2007 quarter outcome was 1.9 per cent lower than the previous quarter and it down by 24.1 per cent on the same period a year earlier.
During the year to March 2007 the industry spent $653 million on new capital expenditure representing a fall of 19.6 per cent on the outcome of the same period a year earlier. This is expected to reverse to some degree as a result of PrintEx 07 held in Sydney during May 2007. New capital expenditure plans currently total $773 million.
The national accounts data show that the Australian economy recorded growth of 1.1 per cent during the March quarter resulting in an annual growth rate of 3.5 per cent on trend basis. The key drivers of economic activity during the quarter were household consumption, business investment, investment in dwellings and increased private non-farm inventories. Net exports continued to detract from growth.
On seasonally adjusted basis, payment to employees increased by 2.0 per cent during the quarter and by 8.2 per cent during the year to March. The private sector gross operating surplus increased by 10.1 per cent during the quarter and by 21.4 per cent for the year to March.
The wages share of the economy declined slightly to 53.3 cent while the profit share increased from 27.7 per cent to 28.1 per cent. Import penetration stood at 35.9 per cent up from the 35.7 per cent level recorded for the same period a year earlier.
According to growth rates among the states and territories - Western Australia reported the highest growth rate with annual growth running at 7.7 per cent in trend terms followed by Queensland 6.6 per cent; Australian Capital Territory 5.2 per cent; South Australia 3.2 per cent; New South Wales and Victoria each reported 3.0 per cent; Northern Territory 1.1 per cent. Tasmania recorded an economic decline of 1.1 per cent.
At a broad industry level mining, manufacturing, construction, retail trade, transport and storage, finance and insurance, property and business services, communication services and ownership of dwellings were all reported to have made positive contributions to growth. Detracting from growth was the agriculture sector.
Printing Industries national policy and research manager, Hagop Tchamkertenian, welcomed the latest economic growth data which showed robust growth for the printing industry.
He said, "The strong reported improvements in industry growth are a welcome development and given that we have now had three consecutive quarters of reported improvements the industry is progressing though an expansionary phase."
"At the Australian economy level growth also picked up significantly during the March quarter, which is likely to raise concerns within the Reserve Bank if it starts to place upward pressure on prices. Retail trade activity, which is an important consumer of printed matter, has also continued to grow strongly."
Tchamkertenian said that the buoyancy of the March quarter growth data has not come as a surprise.
"Following the release of strong sales and pre-tax profits data there was always a chance for a special set of numbers and the March 2007 quarter growth data certainly did not disappoint. The challenge for the printing industry is to consolidate the good economic news" he said.