Signs of a possible recovery emerge

Early signs of a possible economic recovery are now apparent.

But there are still dangers ahead.  Even the Treasurer, Wayne Swan, admits that.

Mr Swan told reporters in Brisbane specifically yesterday that early withdrawal of the government’s economic stimulus package would “threaten the recovery.”

That warning came as the Australian Bureau of Statistics released a set of figures which reflected the classic early signs of an economic recovery.

It reported that retailers profits are up, that retail sales are steady, but that shopkeeper’ stocks are falling.

These are hopeful signs.

If  the nation’s storekeepers are watching their stocks fall, while  maintaining their sales, their usual response would be to place orders for more goods.

And that, in turn, should start to revive the nation’s factories.

There can be no doubt that the Federal government’s stimulus packages have helped to produce this  situation.

However the first of its peaks passed in the June quarter.  The second – and final peak – will be reached in the current quarter.

We will have to wait till Wednesday, though,  to find out just how big the impact of the government’s early stimulus measures have been.

That’s when the Bureau will release the June quarter national accounts.

The Bureau has just released are its June quarter Business Indicators.

These showed that retail profits rose 7.7 per cent in the June quarter, while sales remained steady and the level of stocks held by Australia’s shopkeepers fell by 1.8 per cent, on seasonally adjusted figures.

Factory owners, though, saw their sales fall by 2.9 per cent by volume during the quarter.

Mr Swan had told a radio interviewer earlier  that the government’s stimulus measures had supported jobs, small business and business confidence.

And he vowed that the stimulus would not be withdrawn prematurely.

“…to prematurely withdraw it would risk stalling the economy,” Mr Swan said.