Car sales jump 3.3% in December, World Bank says recovery is underway: Economy Roundup

The total number of new motor vehicles sold increased by a seasonally adjusted 3.3% to 89,741 in December when compared to November figures, the latest numbers from the Australian Bureau of Statistics reveal.

This equates to a massive jump of 17.2% when compared to the December 2008 estimate.

Vehicles classed as “other” sold with an increase of 14.2%, while sales of sports utility vehicles increased by 3.8%. In comparison to December 2008 figures, other vehicles increased by 38.6% while sports utility vehicles increased by 36.7%.

Sales increased for five of the eight states or territories, with Tasmania recording the largest increase of 17.9%, followed by New South Wales and Queensland with 5.6% and 5.5% increases respectively.

Overseas, the World Bank has said the end of the global economic crisis has arrived and a recovery is now underway, but governments must continue to hold up domestic economies.

In the organisation’s Global Economic Prospects report for 2010, it said the recovery led by China and India does pose some risks that could potentially reduce the flow of capital.

“Unfortunately, we cannot expect an overnight recovery from this deep and painful crisis, because it will take many years for economies and jobs to be built,” chief economist Justin Lin said.

The report also said it could be some years before world economies recover losses, and suggested there was “considerable scope” for nations to reduce borrowing costs.

The report forecast global growth this year of 2.7%, with 3.2% growth expected in 2011 – compared to just 2.2% growth during 2009.

Shares lower after Wall Street decline

Meanwhile, the Australian sharemarket has opened lower today after equity and commodity markets fell due to fears that China’s lending practices may hinder the global economic recovery.

The benchmark S&P/ASX200 index was down 20 points or 0.43% to 4847.4 at 12.10 AEST, while the Australian dollar fell to a two-week low of US90c.

Commonwealth Bank shares increased by 0.6% to $56.92, while ANZ shares lost 0.8% to $23.09. Westpac gained 0.6% to $25.63, as NAB lost 0.5% to $27.31.

In the mining sector, OZ Minerals has said production at its Prominent Hill mine has exceeded its expectations during the final quarter of the year, with 36,497 tonnes of copper and 30,526 ounces of gold produced in the three months ending December 31.

The company also said findings from studies showed the mining process of higher grade western copper resources should meet deadlines.

“This should provide synergies that improve the economics of the overall underground project, including the main deposit,” the company said.

“While OZ Minerals remains optimistic about the ability of the Prominent Hill system to support an underground mining operation, and work is ongoing to establish the optimum development scenario, it is essential that returns justify the inherent development and operational risks.

Santos records 2% jump in fourth quarter production

Meanwhile, oil and gas Santos posted a 2% rise in fourth quarter production to 13.9 million barrels of oil equivalent, bringing the total output for the year to 54.4 million. While revenue for the quarter dropped 7% to $500 million, chief executive David Knox said the production targets had been met.

“The base business delivered a solid production performance with new production from Oyong in Indonesia and strong production from John Brookes,” he said in a statement.

Superannuation funds performed well during 2009 but the amount of personal contributions from investors has declined, SuperRatings has revealed.

The researcher said recently the median balanced super fund produced a return of 12.9% during the last calendar year, but personal contributions dropped by 40% during 2008-09.

“The strength of this rally has surely convinced the average Australian that the global financial crisis is over,” SuperRatings managing director Jeff Bresnahan said in a statement, but pinned the personal contribution decline on “a loss of confidence”.

In the US, Bank of America has reported a higher than expected loss due to bad loans and the repayment of funds from the government bailout program. The bank posted a quarterly loss of $US5.2 billion, or 60c per share, compared with a loss 12 months earlier of $US2.4 billion, or 48c per share.

Stocks posted their worst drop of the year so far, due to fears China would hurt a global economy due to its cutbacks on lending ordered by the government. The Dow Jones Industrial Average fell by 122.28 points or 1.14% to 10,603.15.