Activity in the construction industry during December remained subdued despite improvements in employment, the latest data from an Australia Industry Group-Housing Industry Association survey shows.
The survey, which was based on responses from 200 firms, found credit conditions were a dampener on major projects but the construction of new houses has remained strong. Activity rose 1.7 points to 49.3 – just below the 50-point level separating expansion from contraction.
“The results clearly show that construction industry conditions remain tough overall with many businesses facing ongoing difficulties in securing new project work,” AIG associate director of public policy Peter Burn said in a statement.
“While the stronger growth in house building is encouraging and provides critical support to overall levels of activity, the impact of higher interest rates and the removal of the first home buyers grant boost will test the durability of the housing recovery over the coming months.”
The Australian sharemarket has opened higher today, following good leads from Wall Street despite lower commodity prices overnight.
The benchmark S&P/ASX200 index was up 28 points or 0.59% to 4928.1 at 12.00 AEST, while the Australian dollar fell to US91c.
Commonwealth Bank shares gained 1.1% to $56.07, while ANZ rose 1.3% to $22.40. Westpac lifted 1.2% to $25.34 as NAB also gained 0.1% to $27.02.
Independent Liquor denies Woolworths deal
As reported in The Australian, Independent Liquor has stated it is not for sale, negating rumours supermarket giant Woolworths was preparing to make a bid for the company.
“We’re not selling the business and we have no intention of selling the business,” chief executive Peter Murphy stated.
Murphy also said the company was now focusing on completing an operational overhaul, and its current private equity owners are happy in their positions. Additionally, he said a venture with Woolworths would create competition issues.
CBH Resources shares have been placed in a trading halt due to the pending release of an announcement, according to a statement given to the ASX.
The company’s shares gained 26% yesterday due to market speculation regarding a deal with rival Perilya. The ASX issued a price query, to which the company responded it is in discussions with a number of parties.
Pallet manufacturer Brambles has now changed up its CHEP business senior management board, including the departure of global mergers and acquisitions head Craig van der Laan.
CHEP Australia president Paul McGlone will act as interim president of CHEP Asia-Pacific, with chief financial officer Greg Hayes to take over the merger and acquisitions role.
China Investment Corp may be contemplating a bid for Chinalco’s stake in Rio Tinto, according to Reuters. If the bid were to go ahead, CIP would then control one of the world’s largest mining firms.
“Chinalco being there is kind of a double-edged sword because they were trying to block the BHP Billiton thing early on, and they wanted a seat on the board,” DJ Carmichael analyst James Wilson said.
“Perhaps CIC might want to take advantage of an increasing, very upward momentum iron ore market at the moment,” he added.
Kraft gains EU approval for Cadbury bid
Overseas, Kraft has now been granted preliminary EU approval for a takeover bid for Cadbury, allowing the company to work on a plan attractive to shareholders.
“The decision is conditional upon the divestment of the Polish and Romanian chocolate confectionery businesses of Cadbury,” the EU said in a statement. “In view of the remedies proposed, the Commission has concluded that the operation would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.”
Competition Commissioner Neelie Kroes said discussions with Kraft had satisfied officials, and advised the “proposed takeover would not adversely affect competition anywhere in Europe and that consumers would not be worse off”.
In the US, new figures from the Labour Department revealed overnight the number of workers filing new jobless claims moved up by 1,000, with initial claims for unemployment benefits rising to 434,000 – lower than expected on Wall Street.
The relatively positive data boosted confidence in New York, with the Dow Jones Industrial Average gaining 33.18 points or 0.31% to 10,606.86.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
