Moody’s declares economic outlook stable
(2 September 2011 – Australia) Moody’s Investors Service has reported the outlook for Australia’s corporate sector is stable for the next 12 to 18 months.
The ratings agency’s senior credit officer Ian Lewis said in a statement that revenue and earnings were expected to continue to grow with help from the demand for commodities and a high employment rate.
Uncertainty caused by renewed weakness in the global economy was likely to make firms more cautious, and austerity measures implemented by Australian firms during the global financial crisis were likely to continue, given the uncertain global economy.
Moody’s said operating conditions for most companies in Australia were benign, but earnings could weaken or become more volatile as a result of the strong Australian dollar.
Input costs were unlikely to come down soon, and wage levels and potential strikes could hurt some companies.
‘‘We expect regional inflationary pressures, high oil prices, and strong demand for commodities to lead to input cost pressures for many manufacturers, transport companies, and others lacking strong contractual pass-through or offsetting higher product prices,’’ Mr Lewis said.
Uncertainty caused by renewed weakness in the global economy was likely to make firms more cautious, and austerity measures implemented by Australian firms during the global financial crisis were likely to continue, given the uncertain global economy.
Moody’s said operating conditions for most companies in Australia were benign, but earnings could weaken or become more volatile as a result of the strong Australian dollar.
Input costs were unlikely to come down soon, and wage levels and potential strikes could hurt some companies.
‘‘We expect regional inflationary pressures, high oil prices, and strong demand for commodities to lead to input cost pressures for many manufacturers, transport companies, and others lacking strong contractual pass-through or offsetting higher product prices,’’ Mr Lewis said.
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