Latest National Accounts make it clear the Australian economy is performing well in comparison with expectations and in comparison with the rest of the world, says Heather Ridout, chief executive Australian Industry Group.
"At the same time, the growth of 0.9 per cent in the December quarter does not represent a sharp recovery by any means, she said.
“Rather, it is consistent with our view that the recovery is gradual and patchy rather than strong. This is reinforced by our surveys of business performance in the manufacturing, services and construction sectors.
"We remain very wary of the impact of the withdrawal of monetary stimulus and any acceleration of the planned withdrawal of the fiscal stimulus.
"The stimulus measures such as low interest rates, home buyers boost, investment allowance and delayed impact of cash payments, clearly all had a favorable impact on the national accounts and manufacturing in particular in the quarter.”
Ms Ridout said while the widespread manufacturing growth in the quarter is a testimony to the resilience of the manufacturing sector, it should be seen in the context of the sharp fall in activity over the past 18 months.
Production by the sector remains behind where it was in June 2008.
The growth in the manufacturing sector in the December quarter is consistent with the Ai Group manufacturing index, the Australian PMI.
“The index suggests the pace of the improvement eased considerably from the end of 2009," Mrs Ridout said.