（June 24, 2010）

Australian industrial activity is expanding briskly this quarter, a survey showed today, with output and new orders rising and employment growth set to accelerate from already healthy levels.

The survey from Westpac and the Australian Chamber of Commerce and Industry showed demand and investment remained resilient depiste rising interest rates and turmoil in global financial markets.

The survey's main composite index of activity eased just a shade to 56.6 in the second quarter, the second highest reading since the first quarter of 2008. That was well above its decade average of 52.1 and pointed to manufacturing expanding at an above-trend pace.

"The index continues to imply an acceleration in annual private sector final demand growth in mid-2010 to an above-trend pace of around 5 percent a year," said Anthony Thompson, a senior economist at Westpac. Manufacturers' 12-month investment plans improved markedly to well above decade average levels, he added. The net balance for plant and equipment plans doubled to +18 per cent, the highest since the fourth quarter of 2007.

The index of labour demand remained at a healthy +7 points, pointing to an acceleration in employment growth to around 3 per cent a year, from May's already strong 2.5 per cent.

Another key feature of the survey was the re-emergence of manufacturing price pressures after an extended absence, said Thompson. The average selling prices net balance turned positive for the first time since late 2008, jumping to +5 per cent from -14 per cent the previous quarter.

Firms were somewhat more cautious on the outlook for the third quarter, with the index of expectations dropping to 54.8, from a record high of 64.7 previously.

(Source: theage.com.au)