Australian companies are feeling the pinch as inflation soars and profits are slashed
As inflation soars and wage bills increase, Australian companies are well and truly feeling the pinch.
New statistics reveal profits are down right across the private sector.
Australian companies saw a 12 per cent drop in profits in the three months to September. This is the biggest fall since the 1990s.
This comes on the day the nation’s Reserve Bank is expected to announce another interest rate hike.
This will be the eight consecutive rise.
As profits fell across a broad range of industries, Australia’s Treasurer Jim Chalmers says the country’s economy isn’t immune “from the impact of a global energy crisis and high, persistent inflation”.
“We are absolutely focused on doing what we responsibly can to ease cost-of-living pressures in ways that don’t add to inflation, and to build a more resilient economy”
Chalmers also warns China’s recent Covid outbreak will only put “further strain on global supply chains”. He believes this only “increases uncertainty heading into the new year”.
“Our economic plan has been carefully designed to deal with the inflation challenge in our economy. To avoid putting upward pressure on interest rates,” Chalmers said.
Soaring energy prices are just continuing to put pressure on businesses. Salaries were also up 11 per cent in the quarter.
It’s likely this has a lot to do with the number of Australians who are employed right now and the higher wages and incentives companies are offering to attract and retain staff.
But not all industries are seeing a decline.
The Hospitality sector is booming, with earnings up by 64 per cent over three months as Australians ramp up travel following two years of Covid disruptions.
