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--Company Profits Rise More Than Expected
By Sophia Rodrigues
     SYDNEY (MNI) - Following are the five key observations we made from
Business Indicators data for the fourth quarter published by the Australian
Bureau of Statistics Monday:
     --Business inventories rose 0.2% q/q, less than MNI median forecast for
0.4% rise, and follows a small downward revision in Q3 inventories. As a result,
inventories could either make a small detraction or lead to flat contribution to
Q4 GDP. Overall, it poses downside risk to current MNI median forecast for Q4
GDP of +0.5% q/q and +2.5% y/y.
     --Inventories in the retail sector fell 0.5% q/q and this was the third
straight quarter that saw no rise in retail inventories. The data is a
reflection of the headwinds facing the retail sector which is also seen in the
AI Group's monthly performance of services index which showed retail sub-sector
at lowest level since June 2012 in the February data.
     --In trend terms, inventories was flat q/q for two straight quarters and
this is much lower than 0.8% q/q rise seen in Q4 of 2016.
     --Company profits rose more than expected (+2.2% vs +1.3% MNI median
forecast) and rebounded after two quarters of decline. The rise was largely on
account of a 4.2% q/q rise in mining profits and a 9.5% q/q rise in
manufacturing profits.
     --Wages and salaries rose 1.0% q/q, marking the slowest pace of growth in
three quarters. Wages in construction slowed to a 1.9% q/q in Q4 from +3.6% in
--MNI Sydney Bureau; tel: +61 2-9716-5467; email:
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