Yesterday's decision by the Reserve Bank of Australia (RBA) to cut official interest rates has been partially justified with today's release of economic growth data showing modest rates of growth for the Australian economy.
Encouragingly however, the printing industry grew at a robust rate of 1.7 per cent in trend terms during the September quarter and by 6.6 per cent when compared to the same period a year earlier according to the data released by the Australian Bureau of Statistics (ABS).
The data shows that the printing industry was the second fastest growing manufacturing sector after metal products. The printing industry has now registered four consecutive quarters of economic growth, a performance only matched amongst the manufacturing sector by the petroleum, coal, chemical and rubber products sector.
The Australian economy's growth rate is also showing signs of accelerating with the 0.8 per cent growth rate reported during the quarter helping lift the annual growth rate to 2.1 per cent.
Key drivers of growth during the September quarter featured household consumption, non-dwelling investment, and machinery and equipment investment. Net exports (imports less exports) detracted from growth.
On trend basis mining, manufacturing, construction, wholesale trade, accommodation and food services, financial and insurance services, health care and social services all made positive contributions to economic growth while agriculture, forestry and fishing and administrative and support services made negative contributions to growth.
Amongst the states and territories, Queensland and Western Australia made the largest contributions to economic growth, followed by New South Wales and Victoria.
State final demand, a measure of economic growth at the state and territory level, showed Western Australia grew by 4.1 per cent during the quarter and by 13.0 per cent during the year to September; while Queensland grew by 2.9 per cent during the quarter and by 8.2 per cent during the year to September.
The main states of New South Wales and Victoria grew modestly with reported growth of 0.4 per cent during the quarter and 1.5 per cent during the year and 0.5 per cent during the quarter and 2.1 per cent during the year respectively. South Australia went backwards by 0.2 per cent during the quarter and registered a very modest 0.2 per cent growth for the year; as did Tasmania which reported a decline of 0.1 per cent and flat growth for the year. The ACT also contracted by 0.1 per cent but registered a modest yearly growth rate of 1.3 per cent.
Other major printing industry economic data released during the past week shows new capital expenditure grew by 23.4 per cent during the September 2011 quarter compared to the June 2011 quarter. When compared to the same period a year earlier - September quarter 2010, the improvement is even more noticeable at 49.1 per cent.
The reported improvement in capital expenditure needs to be put in a proper context as it is comes off a low base. The printing industry capital expenditure data confirms that investment levels have not yet recovered and remain considerably below historical levels.
When the full year results are compared to the 2010 full year results, some $236 million of new investments took place in the printing industry during the year to September 2011, representing a deterioration of 40.6 per cent compared to the $397 million outcome reported for the same period a year earlier.
Based on industry expectations, there are some $113 million worth of new investments in the printing industry's investment pipeline between now and the end of June 2012.
Printing industry sales were also reported to have increased by a modest 1.7 per cent during the September 2011 quarter compared to the June quarter. Compared to the September 2010 quarter sales growth was a bit more respectful at 3.8 per cent.
During the year to September 2011 the printing industry generated sales of $8,312 million representing a modest decline of 0.4 per cent on the previous year's outcome of $8,347 million.
Pre-tax profit data shows a fall of 5.3 per cent in the September quarter compared to the previous quarter, but a solid 25.6 per cent improvement on the 2010 September quarter outcome. For the full year to September the pre-tax profits figure was reported at $664 million representing an improvement of 34.7 per cent on the previous period's reported outcome.
Printing Industries National Manager for Policy and Government Affairs, Hagop Tchamkertenian, said while the economic growth data reveals that growth is gaining momentum at the Australian economy level, economic growth continued to remain patchy.
"We are starting to see significant differences between sectors and regions in terms of economic growth. If you examine the year end figures agriculture and utilities are in decline, manufacturing is reporting modest growth and even paradoxically total mining as a sector is also in decline," he said
Mr Tchamkertenian said that if households felt confident about future economic prospects then they were more likely to respond positively to yesterday's RBA interest rate cut and start spending.
"The decision by the RBA to cut interest rates should provide a welcome stimulus to economic activity. Hopefully the major lenders will pass on the rate cut in full to their customers without significant delay - by customers I mean both households and businesses.
"Households have clear choices about what to do with the extra cash that is expected to end up in their pockets. They can spend it, save it or spend part of it and save the rest.
"If the bias is towards spending more and saving less then there should be direct benefits for retail trade activity and some spin-off benefits for the printing and associated industries going into 2012," he said.
Christmas this year may have arrived earlier than normal thanks to the RBA Santa.
