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Manufacturers end year in positive mood

AAP logoAAP 14/12/2016 Colin Brinsden, AAP Economics Correspondent

Manufacturers are heading into 2017 in a positive mood, a much needed boost for the economic outlook after the recent downturn.

The Australian Chamber of Commerce and Industry-Westpac industrial trends survey for the December quarter, released on Thursday, found manufacturers buoyed by new home building activity and a lower currency fuelling exports.

That's giving them the confidence to lift investment intentions.

"Businesses are looking to 2017 to be a positive year for profits, driven by rising turnover and a lower Australian dollar boosting export returns," Westpac senior economist Andrew Hanlan said.

The survey's composite index rose to 60.3 points in the final three months of 2016, up from 57.4 points in the September quarter and after a mid-year dip to 55 points.

A figure above 50 points shows the sector is expanding.

The rise reflected strength across new orders, output and overtime and an emerging resilience in employment, Mr Hanlan said.

Australian Chamber boss James Pearson was encouraged by the improvement in investment intentions heading into the new year.

"This is a testament to the resilience of Australian manufacturers, who are continuing to invest despite the headwinds revealed in the recent negative GDP figures," he said.

However, while the Australian dollar has led to an improved export performance, Mr Pearson said Australia cannot allow factors over which its has little control determine its economic fortunes.

"Australia must seize opportunities by undertaking the vital reform that we know will make our economy more competitive.

This includes cutting the burden of company tax to stimulate investment, making it easier to hire people through sensible changes to workplace relations and helping young people to get an apprenticeship.

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