Job ads grow, Dollar falls to US81c: Economy Roundup

The number of Australian job advertisements published in May grew by 4.3% to a seasonally adjusted 167,633, according to the latest ANZ monthly index.

The figure is an increase of 21.7% from the same point last year, with annual growth now at its fastest since February 2008. Internet job ads were up 5%, a 22.3% annual increase, representing the fastest growth since April 2008.

But the print industry is still struggling, with ads down by 6.5% in their biggest decline since January, despite remaining 13.2% higher than in May last year.

ANZ senior economist Katie Dean said in a statement the index shows employers are still confident despite rising interest rates. However, she also noted the significant decline in newspaper ads.

“This is not unexpected given three consecutive interest rate rises in the first half of 2010 as well as the now uncertain global backdrop,” she said.

“With employment growth racing ahead of output growth in the first part of 2010, it may also be that some firms begin to slow the addition of new workers until growth in activity picks up. This would boost Australia’s hitherto subdued productivity performance.”

The results of this month’s index, she said, gives the Reserve Bank of Australia enough reason to hold off on another interest rate rise next month.

Dollar down to US81c

Meanwhile, the Australian dollar has continued to fall in value due to a shocking morning for the financial market, during which the sharemarket has dropped over 3%.

The dollar now buys US81c, following a report from the US saying the number of jobs added to the economy during May was lower than expected. The Euro has also fallen to a four-year low, dropping to $1.45.

The sharemarket has fallen after a shocking day on Wall Street last Friday, after the Dow Jones Industrial Average dropped over 3% and ended the day below the 10,000-point mark.

The benchmark S&P/ASX200 dropped over 3% early this morning, and was down 146 points or 3.3% to 4302.5 at 12.00 AEST.

AMP shares dropped 4.8% to $5.52, while Commonwealth Bank shares also lost 3.4% to $49.74. ANZ lost 3.7% to $21.80 as Westpac fell 3.6% to $21.93.

Australian construction activity grew for a third consecutive month during May although the rate of expansion has decreased as commercial and apartment building becomes more difficult, a prominent index shows.

The Australian Industry Group-Housing Industry Association index dropped by 2.6 points to 53.2, but still remained above the 50-point level separating expansion from contraction.

“The continued expansion of the construction sector as a whole and the ongoing growth of new orders in housing, engineering construction and commercial construction are positive signs that the recovery in the sector is gaining traction,” AIG associate director of public policy Peter Burn said in a statement.

The index’s measure of house building dropped 1.5 points, but the apartment sector took a 16.8 point hit to 42 – well below the 50-point barrier. New orders dropped 0.4 points to 52.7, while employment only recorded 0.5 decrease to 56.3.

NAB comfortable in Britain

Meanwhile, NAB has said it is comfortable with its current operations in Britain and is in no position to increase its activity.

“In relation to UK, we are comfortable with status quo and we are under no pressure to participate in the consolidation there,” a spokesman told AAP. The comment comes after queries were put to the bank regarding the possible purchase of some RBS branches.

Meanwhile, pallet manufacturer and logistics group Brambles has said it will lose the business of US-based food company ConAgra.

But the firm also said in a statement that the move would have no impact on 2010 accounts with the company representing “less than 1% of Brambles’ total annual sales revenue”.

“Brambles confirms that ConAgra advised CHEP Americas late last week of its intention to transfer most of its volumes to an alternative pallet pooler,” the company said.

“We are focused on delivering customer needs and strengthening our product offering in CHEP USA through the Better Everyday program, which remains on track,” chief executive officer Tom Gorman said in a statement.

NSW rushes to complete sale

As reported by the Australian Financial Review, the NSW Government is rushing to complete the $8 billion sale of power assets before the March state election.

The new timetable gives bidders an extra four months to complete due diligence, with that timetable starting from July 1. Bids must be completed by the end of October and the Government will have six weeks to choose a buyer.

Meanwhile, Prime Minister Kevin Rudd has told ABC Radio that the proposed resources profits tax could help stop debt problems like those currently plaguing Europe.

“We believe we’ve got the overall design of this tax right, we’ve said we’ve got the rate right,” he said this morning. “We’ve said we would consult with industry on the question of detail, on implementation, and generous transition arrangements.”

“Right now, people look at Greece and they look at Europe and they see huge levels of sovereign indebtedness,” he said.

“In Australia, one of the ways in which we’ve been able to keep the economy strong is by having this large pool of national savings.”