Economic growth in the printing industry picked up during the December 2009 quarter according to data released today by the Australian Bureau of Statistics (ABS). Despite the welcome pick up the industry still remains well below its peak activity levels.

On a trend basis the printing industry was reported to have expanded by an encouraging 3.3 per cent during the December 2009 quarter when compared to the September 2009 quarter. Compared to the same period a year earlier, industry activity is still down by 3.0 per cent.

On a full annual basis the printing industry reported a decline of 16.2 per cent during the 12 months to December 2009.

The Australian economy also expanded during the December quarter by 0.6 per cent in trend terms. The December growth rate has resulted in an annual growth rate of 2.0 per cent.  

Key drivers of economic growth were household consumption expenditure, government expenditure, investment in dwellings, machinery and equipment and increased inventories. Detracting from growth were net exports (exports less imports). 

Following the release of the economic growth data the ABS has also released all the main economic data for the December 2009 quarter. 

According to the ABS data new capital expenditure in the printing industry was reported to have increased by 13.2 per cent during the December quarter. The outcome represents a 77.0 per cent improvement on the outcome a year earlier. During the year to December new capital expenditure totalled some $498 million representing a significant 33.9 per cent improvement on the previous period’s outcome.

Printing industry sales increased by a modest 0.3 per cent during the December quarter. Total industry sales during the year to December totalled almost $8.8 billion which represents a deterioration of 9.2 per cent on the previous period’s outcome.

Industry margins have started to improve following the third consecutive quarter rise in pre-tax profits during the December quarter. Pre-tax profits were reported to have improved by 39.3 per cent for the quarter. Comparing the 12 months to December 2009 with the previous year, pre-tax profits deteriorated by 28.2 per cent.

Printing Industries National Manager for Policy and Government Affairs, Hagop Tchamkertenian, welcomed the increased pace of economic growth reported at both the printing industry level and the Australian economy level.

"While the growth rate of the Australian economy has not yet reached its long term trend of 3.5 per cent, there are tentative signs that the rate of growth has started to accelerate," he said.

Mr Tchamkertenian said that given the rate of economic growth is still below the long term trend, the Reserve Bank of Australia (RBA) which announced a lifting of official interest rates to 4.0 per cent yesterday needs to now pause to assess the impact of the latest rise in interest rates on economic activity.

"Today's economic growth data confirms that the printing industry is once again growing having registered its second consecutive quarter of growth. Growth at the Australian economy level continues to accelerate.

"It is now important to allow economic growth to reach a level that will be sustainable. While the RBA has foreshadowed further interest rate rises during calendar year 2010 it is critical that further rises do not occur until such time that the RBA is ultra confident that the economic recovery is both durable and sustainable.

"The latest set of economic growth data continues to be influenced by the Federal Government's fiscal stimulus measures. As the stimulus winds down the private sector needs to increase its contribution to economic growth. The RBA must be confident that this has started to occur before it contemplates further interest rate rises," Mr Tchamkertenian said.