Breaking News US/Australia ll Big W, Virgin Australia losses raise risk of an Australian recession

Breaking News US/Australia ll  Big W, Virgin Australia losses raise risk of an Australian recession

Great Australia could fall into a recession for the first time in almost three decades with big companies this week posting abysmal earnings.Discount retailer made an $85million loss in the year to June, which followed a $110million loss in the financial year before that. Bosses blamed tough retail conditions and said they would continue to be tough.Airline also had a woeful year, bleeding $350million during the same period.It blamed a weak Australian dollar – weeks after it sunk below 67 US cents for the first time in a decade, higher crude oil prices and weak demand from consumers.On Thursday announced its full-year profit fell 42 per cent from $64million last year to $37million, weeks after declaring Australia was in the grip of a ‘retail recession’.The upmarket department store chain said it would aggressively close and shrink stores as a result. Its traditional rival Myer reports its earnings next Thursday. Share this article Share AMP Capital chief economist Shane Oliver said the disappointing corporate earnings season results, so far, were a sign of an economy in trouble.’It’s basically telling us that things are pretty soft,’ he told Daily Mail Australia.’A number of companies are like the weakness that we’re seeing in the economy in terms of demand.’ Companies’ bad results : Lost $350million and said it would review all its flights: Lost $85million and said it would close stores: Profits plunged 42 per cent and said it would shrink and close storesAustralia’s construction sector is also struggling, with residential construction activity falling by an annual pace of 9.6 per cent in June.’There’s more weakness to come in terms of housing construction,’ Dr Oliver said.’But we’re also seeing weakness in non-residential construction so all of that is basically telling us the economy is pretty soft.’ The economy is growing at the slowest pace since the global financial crisis a decade ago, with consumer spending levels particularly subdued.Dr Oliver said there was a one-in-five chance Australia would slip into a recession next year for the first time since 1991.’The economy is a lot weaker than many were expecting say six, 12 months ago,’ he said.’Certainly weaker than the Reserve Bank has been allowing for.’ Interest rates were cut to a record low of one per cent in July, taking standard variable home loan down to just three per cent.  AMP Capital chief economist Shane Oliver rated a recession as a one in five chance’A lot of weight has been put on the Reserve Bank to hold things up but there’s only so much monetary policy can do,’ Dr Oliver said.He added the federal government needed to do its bit, by spending more money, instead of just prioritising budget surpluses.’It’s more important to keep the economy growing than to deliver a surplus,’ he said.’There is a case to undertake more fiscal stimulus to help ensure that that is the case.’US President Donald Trump’s trade war with China, Australia’s biggest trading partner, has rocked fin

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