CAUTION NOT MATCHED BY CONDITIONS
“Confidence is lagging behind business conditions”
That was just one of the critical points from the chamber’s economic
update breakfast, held at Kedron Wavell Services Club, on Tuesday 12 June.
The annual event, sponsored by Morgans Financial Limited, provided chamber members with some important observations on the state of the economy as well what to expect in the new financial year.
With growth expected above 3% in 2018, Tom Sartor, Senior Analyst from Morgans, outlined the key issues facing the market and business.
“While profitability is high, businesses are retaining a lot of cash. Put simply, Australia is in quite good shape, but we are lacking the spirit to invest,” Tom said.
However, while the business cycle has created a lot of caution, Tom said that with Australia’s export led recovery set to continue, we can expect decent growth in the foreseeable future.
His key messages and recommendations for business for the year ahead were:
- Expectations about growth should be positive but moderate
- Avoid complacency and be optimistic
- Diversify and follow your business convictions
- When investing follow value rather than momentum.
“The good news is that solid returns are still being achieved and there are plenty of examples of companies that are thriving in the current environment,” Tom said.