Autumn has arrived after a flurry
of economic data on the home front during February. The company reporting season for the six months to
December was extremely positive overall, confirming that corporate Australia is in good shape.
CommSec's survey of results from the
ASX top 200 companies showed 94 per cent recorded a profit in the December half, with total profits up
130 per cent on the previous corresponding period (up 37 per cent excluding BHP). Earnings per share rose
19 per cent, cash levels were up 11 per cent and dividends were up 6 per cent. The strong performance
was due to booming home construction and higher commodity prices, especially for iron ore, which is up
80 per cent over the past year to around US$90 a tonne.
One area of concern is the low level of business investment. The latest
figures from the Australian Bureau of Statistics show new spending on buildings and equipment fell 2.1
per cent in the December quarter, down 15.5 per cent over the year. While the Aussie dollar has fallen
from record highs during the mining boom, Reserve Bank governor Philip Lowe told the House of Representatives
Standing Committee on Economics "it would be better if it was lower still" to support the rebalancing
of the economy. The dollar is currently trading at around US76c.