Post farm gate agribusiness survey – September 2012

The post farm gate agribusiness conditions index posted a decent turnaround following a very weak June quarter. Driving the result was an increase across the three key components that make up the index, with the sharpest turnaround being trading conditions.

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Post farm gate business conditions up but index still negative

  • Post farm gate agribusiness conditions lift in September quarter but remain negative
  • Customer demand, availability of suitable labour and stubbornly high AUD continue to act as constraints
  • Medium term expectations improve, but degree of cautious optimism still present

Business conditions up but still subdued

The post farm gate agribusiness conditions index posted a decent turnaround following a very weak June quarter, with the index bouncing back 8 points. Driving the result was an increase across the three key components that make up the index, with the sharpest turnaround being trading conditions, while profitability and employment recorded more marginal improvements. Despite the turnaround in the index, however, business conditions are still very much subdued. The business conditions index remains in negative territory, which means that on balance, more survey respondents reported poor conditions reporting good. Similarly, employment remains negative which is essentially consistent with a sector shedding jobs while profitability remains quite poor. The much improved reading for trading conditions, which returned to neutral, is also not quite as positive as the headline number suggests. Results were somewhat skewed by the impact of lower livestock prices for meat processors rather than a sudden lift for the post farm gate agribusiness sector as a whole.

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