Company profits in Australia have risen in the final quarter of 2017, while almost all sectors also experienced wage growth.
Gross operating profits were up 2.2 per cent on a seasonally adjusted basis in the three months to December 31, data from the Australian Bureau of Statistics showed.
That compared to market expectations of a 1.5 per cent increase.
Commonwealth Bank senior economist John Peters said year-on-year growth in profits was healthy at 4.3 per cent and the data showed a ‘moderately stronger’ quarter for Australian companies.
‘The lift in company profits was a tad stronger than market expectations and our own forecast of a 1.5 per cent fall,’ Mr Peters said.
The quarterly performance was supported by solid improvements in profitability for miners and manufacturing.
Wages rose one per cent in the December quarter and 4.3 per cent for the year.
ANZ senior economist, Felicity Emmett said the improvement in wages was solid but not as strong as ANZ anticipated after the upwardly revised 1.3 per cent for the September quarter.
‘The wages bill is being supported by strong growth in employment and further gains should support growth in household incomes and consumption, Ms Emmett said.
St George senior economist Jo Horton said wages growth was its best in annual terms since the December quarter of 2012.
With the national accounts, including key gross domestic product data, due out on Wednesday, economists rated the 0.2 per dent increase in business inventories for the December quarter as underwhelming.
Inventories were up one per cent in the year in seasonally adjusted terms.
Westpac’s Andrew Hanlan said the data was on the soft side, with both inventories and profits disappointing, and possibly indicated a weaker contribution to December quarter GDP.
Most economists have forecast a quarterly GDP improvement of 0.5 per cent.