CANBERRA, AAP – Reserve Bank governor Philip Lowe will have the opportunity to respond to last week’s unexpectedly strong economic growth figures when he addresses a business conference on Wednesday.
The national accounts showed the economy expanded more than three per cent for two consecutive quarters for the first time in history as the country rebounded from its first recession since the early 1990s.
The Reserve Bank board held its monthly meeting the day before the data, where it kept the cash rate at a record low 0.1 per cent.
Dr Lowe reiterated the central bank won’t be lifting the cash rate until inflation is sustainably between its two to three per cent target band, and he does not expect that to occur until 2024 .
Addressing the two-day Australian Financial Review Business Summit on Tuesday, former treasurer Peter Costello said he hopes the cash rate rises before then because it will be a sign the economy is strengthening without emergency support.
Dr Lowe will deliver the keynote speech to Wednesday’s summit on ‘The Recovery, Investment and Monetary Policy’.
Meanwhile, there were further promising signs for the labour market with all states and territories posting annual job advertising growth for the first since the beginning of the COVID-19 pandemic.
Job ads posted on seek.com.au rose 4.1 per cent in February, to be 12.4 per cent higher than a year earlier.
“It is close to 12 months since COVID-19 severely impacted the employment market and we are pleased to observe continued improvement with the healthiest year-on-year job ad growth since the pandemic began,” SEEK ANZ managing director Kendra Banks said.
The top three industries contributing to this annual growth rate were trades and services, hospitality and tourism and healthcare and medical.
However another survey showed some businesses could be in for a tough time as support measures put in place by the federal government at the start of crisis unwind.
The February CreditorWatch business risk review showed there had been a 61 per cent jump in firms entering administration since January, having been in decline in the past 12 months.
“This is a sign of the commercial climate returning to more normal conditions,” CreditorWatch CEO Patrick Coghlan said.
“This figure is likely to rise again in the coming months, as JobKeeper ends and the three-month reprieve on credit arrangements for struggling smaller businesses comes to a close.”