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Current conditions still good but concerns for the future remain



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MEDIA RELEASE Immediate 4 December 1998 5V U _^U _L X -

Current Conditions Still Good But Concerns for the Future Remain

Statement by Mark Paterson, Chief Executive on the release of the November 1998 National Survey o f Business Expectations

The difference between present and future is well shown by the latest survey results.

As far as the present is concerned, sales and investment are continuing to grow and at reasonable rates. But because of the problems caused by our trade with Asia and because of concerns about economic growth across the world, the future is less certain. This too is reflected in these latest figures.

The Index measuring Australia’s Economic Performance was recorded at 41.3 indicating that business in general believes that the economy will slow in the year ahead. While this latest results was marginally higher than the 39.9 recorded in August, it is clear that business believes that Australia’s currently very strong rate of growth is unlikely to be maintained.

This was also the view of the Reserve Bank which lowered interest rates on the same day the economy registered a growth rate of 5.0%. The economy is going very well now but the likelihood is that it will slow.

Not that the slowdown is expected to be immediate. The figures looking ahead to the Christmas period show expected sales to be extremely strong. The data also show that investment growth is expected to continue, particularly amongst medium and large sized firms.

And what may be most important in these difficult times, the indications are that higher rates of export growth is expected. It will be an extraordinary achievement if Australian exports are maintained in spite of the loss of markets which has occurred because of the economic downturn in the economies of so many of our major trading partners.

For further comment, please contact: Mr Mark Paterson Chief Executive 02 6270 8004 (B/H) 0419 215 037 (mobile)

Dr Steven Kates 02 6273 2311 (B/H) Chief Economist 02 6295 0827 (A/H)

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