Embargoed until: 11.

30am Tuesday 10 April 2012

Monthly Business Survey

March 2012

Confidence and conditions grind higher but with little jobs growth. Forward indicators marginally improve but remain subdued. Multi speed economy still to the fore – with non mining edging up a touch. Domestic forecasts edge lower with unemployment up. Rates view unchanged.
Businesses appeared slightly more confident about near-term activity in March than in February, although a degree of caution still seems to be inhibiting hiring and investment decisions. Positive data out of the US, which helped push the Australian dollar lower, and reduced Euro banking concerns probably aided sentiment. Business conditions continued to edge up in March, albeit marginally. Trading conditions are relatively stronger but employment remains flat to subdued. This month’s Survey suggests economic momentum is fundamentally going sideways – but may just be starting to edge up. Forward indicators of demand, however, remain lacklustre. Credit demand fell back to low levels in March, following a pick up in February (consistent with official RBA data). Overall, the survey implies underlying demand and GDP growth of around 3¼ -3½% in Q1 2012. Conditions improved sharply in mining and finance/ business/ property in March, but deteriorated reasonably heavily in wholesale and recreation & personal services. While mining conditions continued to outperform all other industries, the modest pickup in conditions in February and March appears to have been more broadly based. Conditions strengthened sharply in WA for a second consecutive month, while Queensland was the only state to report weaker conditions. Labour costs growth was broadly unchanged in March, while purchase costs and product prices growth both eased to fairly subdued levels. Retail prices weakened and appear to have fallen slightly in Q1. Implications for NAB forecasts (See latest Global and Australian forecasts report also released today): Global financial and commodity markets have been buoyed by the European Central Bank’s LTRO operations that added substantial liquidity to the banking system, greatly reducing market volatility and risk aversion. The softening that was evident in both business confidence and activity measures through the latter half of last year seems to have eased. Activity remains weak in the Euro-zone and UK, and several big emerging market economies have experienced a substantial slowing from late 2011. While China may be currently slowing, prospects for 2012 remain favourable – as is the US outlook. We have left our global forecasts unchanged – 3¼% this year and 3¾% in 2013. Australian near-term outlook revised down marginally, consistent with a continuing sluggish survey, a deteriorating housing sector (a concern that needs to be watched) and surprisingly weak export performance in early 2012. While we expect the latter to be temporary (Chinese New Year, weather, coal strikes) and there is hope that the economy may be marginally gathering momentum, the reality is that the current soft patch will see a slight deterioration in near-term unemployment prospects – we now expect a peak of around 5½% mid-year before declining back to around 5% by end 2013. Mining projects expected to bolster activity later in 2012 and beyond. Our GDP forecasts are now a touch below 3% (was 3¼%) in 2012 and 3¾% (unchanged) in 2013. RBA is signalling a rate cut in May provided inflation is low. We have not changed our rate views and with our Q1 core CPI forecast of around ½% – we expect a rate cut. We then expect the RBA to be on hold through 2012. Our core inflation forecasts are unchanged – with core (ex carbon tax) 2.2% in 2011/12 and 2.5% in 2012/13.
Key monthly business statistics*

Jan Feb 2012 2012 Net balance Business confidence Business conditions Trading Profitability Labour costs Purchase costs Final products prices 4 1 2 3 4 8 -1 1 % change at quarterly 0.8 0.9 0.2 0.6 -0.1 0.2

Mar 2012 3 4 8 3 rate 0.9 0.3 0.1 Employment Forward orders Stocks Exports Retail prices Capacity utilisation rate

Jan Feb 2012 2012 Net balance

Mar 2012

1 0 1 -1 -2 -1 4 4 2 -3 -3 0 % change at quarterly rate -0.6 0.3 -0.1 Per cent 81.2 80.6 81.1

* All data seasonally adjusted and subject to revision. Cost and prices data are monthly percentage changes expressed at a quarterly rate. All other data are net balance indexes, except capacity utilisation, which is an average rate, expressed as a percentage. Fieldwork for this survey was conducted from 26 to 30 March 2012, covering around 400 firms across the non-farm business sector.

For more information contact: Alan Oster, Chief Economist (03) 8634 2927 Mobile 0414 444 652

Next release: 19 April 2012 (March quarterly) 7 May 2012 (April monthly)

Embargoed until 11:30am Tuesday, 10 April 2012

Analysis
Business conditions improved in March – up 1 point to +4 index points. Conditions have improved (slightly) in each month of 2012 to date and appear consistent with an economy that is starting to gain momentum – albeit marginally. Business conditions remain a touch above the long-run average (of +1 for the full history of the survey). The strengthening in conditions in the month largely reflected a tick up in profitability and employment conditions, while trading conditions were unchanged. However, conditions reflect high trading rather than employment. Overall, while conditions point to an economy embarking upon a modest recovery, they remain divergent across industries and states. Furthermore, despite generally improving in March, forward indicators remain fairly lacklustre suggesting that activity will continue to be soft, at least in the near term. Business confidence ticked up in March, lifting 2 points to +3 index points, partly unwinding the step down in sentiment recorded in the previous month. Confidence remains susceptible to gyrations in global markets. The positive boost to sentiment in March appears to have partly stemmed from optimism about the recent moves to stabilise the Greek debt situation, as well as recent positive economic data out of the US. However, this may have been partly offset by intensifying concerns of a more pronounced slowing in the emerging economies. Furthermore, the recent depreciation of the Australian dollar may have provided a small amount of relief for trade-based industries. Overall, the index remains a little below the series long-run average (of +6 since 1989).

Conditions trend higher
Business conditions (net balance)
20

10

0

-10

-20

-30

-40 I II III 2009 IV I II III IV I II III IV I 2012 2010 Seasonally adjusted Conds 1990s recn 2011 Trend

Average of the indexes of profitability and employment.

trading

conditions,

Confidence ticks up but still soft
Business confidence (net bal., s.a.)
20

10

0

-10

-20

-30

-40 I II III 2009 IV I II III IV I II III IV I 2012 2010 Seasonally adjusted Conf 1990s recn 2011 Trend

Excluding normal seasonal changes, how do you expect the business conditions facing your industry in the next month to change?

Business conditions by industry. Conditions improved across most industries in the month, with the exception of wholesale and recreation & personal, where they deteriorated significantly. Retail, conditions were unchanged at very subdued levels. The sharpest improvements in conditions in the month were in mining – in part reflect the strengthening in iron ore prices – and finance/ property/ business (reflecting global developments). Business conditions were strongest in mining (+36) and transport & utilities (+26). They were weakest (and contractionary) in retail (-15), construction (-6), manufacturing (-4) and wholesale (-3). The NAB survey has highlighted the strength in mining relative to other sectors for a number of years. Since the start of 2010, mining business conditions have averaged a net balance of +24 index points, compared to +3 points for overall conditions. While the mining sector is under-represented in the survey, the strength of conditions does affect the overall index. The chart shows that the rise in total business conditions in January reflected relative strength in mining – nonmining sector conditions in aggregate actually softened. Since then, however, the modest pickup in conditions in February and March appears to be more broadly based.

Non-mining conditions on the rise
Business Conditions
Net bal. Net bal.

10

10

Total 5 Non-mining 0 0 5

-5 2010
Source: NAB

-5 2011 2012

2

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Analysis (cont.)
Business conditions by state. Conditions strengthened considerably in WA in March, consolidating a sharp pick up in the previous month; the improvement in WA conditions in March coincided with a surge in mining conditions. Conditions also improved solidly in Victoria, while they strengthened marginally in NSW, SA and Tasmania. Queensland was the only state to report deteriorating conditions in the month. In levels terms, conditions in the mainland states were strongest in WA (+21), followed by NSW (+5) and Victoria (+4), while they were weakest in Queensland (-4). Business confidence by industry. Business confidence improved across most industries in the month, after weakening in February (with the exception of mining). Confidence picked up most significantly in mining, construction and finance/ business/ property, while it deteriorated in recreation & personal services, transport & utilities and manufacturing. In levels terms, confidence was highest in mining, construction (both +10) and finance/ property/ business (+5), while it was lowest in recreation & personal services (-1) and manufacturing (zero). The strength in construction confidence probably reflects mining and infrastructure developments rather than residential construction – where activity has been deteriorating. Business confidence by state. Business confidence improved solidly in Tasmania (on a small sample) and Queensland. Confidence also improved in Victoria and was marginally better in NSW. In contrast, confidence deteriorated heavily in SA, after improving in the previous month, while it also softened in WA. In levels terms, confidence of the mainland states was highest in WA (+9), Queensland (+5) and NSW (+4), while it was lowest in SA (-6) and Victoria (-2). Variation in business conditions across sectors has become pronounced since late 2009. This can be observed by comparing trend conditions of the strongest performing sectors (mining, transport & utilities, recreation & personal services and finance/ business/ property) with trend conditions of the weakest performing sectors (retail, manufacturing, construction and wholesale). The persistent divergence in industry conditions indicates that the Australian economy is undergoing a structural transformation towards mining and servicebased industries, and away from traditional manufacturing and discretionary retailing.

Economy remaking itself
Business conditions
3-month moving average; seasonally adjusted
Net bal. Net bal.

Strong*

20 10 0 -10 -20 Weak** -30 2000 2003 2006 2009 2012 2002 2005 2008 2011
* Strong industries include mining, transport & utilities, recreation & personal services and finance/business/property ** Weak industries include retail, manufacturing, construction and wholesale

20 Gap between weak & strong industry conditions 10 0 -10 -20 -30

The forward orders index picked up marginally in March, rising from -2 to -1 index points. At the industry level, there were widely disparate shifts in orders; manufacturing orders improved very sharply, possibly reflecting the depreciation of the Australian dollar during the month, while they deteriorated heavily in wholesale, transport & utilities and retail. In March, orders were strongest in mining (+22) followed by manufacturing (+10), while they were again weakest in retail (-15) and construction (-7). Capacity utilisation, which has hovered in a range of 80-82% over the past two years, rose by 0.5 ppts to 81.1% in March. Mining, construction and wholesale all contributed solidly to the rise, while utilised capacity declined modestly in transport & utilities. Overall, capacity utilisation was highest in mining (88.7%) and wholesale (84.8%), and lowest in manufacturing (77.2%). Capital expenditure improved marginally in March (up 2 to +6 points), but remains below recent levels, suggesting that business investment may have softened in early 2012. Capital expenditure was highest in mining (+36) and transport & utilities (+33), and lowest in manufacturing (-5) and retail (-3).

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Analysis (cont.)
Forward orders implied softer 6-monthly annualised demand growth for December quarter 2011 than the 4.7% outcome in the December quarter national accounts. Based on average monthly forward orders for the March quarter, the survey implies 6-monthly annualised demand growth will ease to around 3¼ - 3½% in the March quarter. In contrast, business conditions imply that 6monthly annualised GDP growth was stronger than the 2.5% recorded in the December quarter. Based on average monthly business conditions for the March quarter, the implied 6-monthly annualised GDP growth (ex mining) would rise be about 3¼ - 3½% (6 monthly annualised) in the March quarter, around trend. Elsewhere in the survey, cash flow (not seasonally adjusted) was strongest in transport & utilities and finance/ business/ property and weakest in construction and retail. Labour costs growth (a wages bill measure) was unchanged at a reasonably benign 0.9% (quarterly rate) in March. The survey suggests that wage costs pressures are reasonably well contained and are unlikely to be a cause of concern for policy makers. In March, labour costs growth (at a quarterly rate) was strongest in transport & utilities (1.7%), construction (1.4%) and mining (1.3%), and was softest in manufacturing (0.4%) and retail (0.7%). Price inflation across all industries softened marginally in March and remained very subdued at just 0.1% (at a quarterly rate). The direction of price changes was mixed across industries; inflationary pressures appear to have risen in construction and finance/ property/ business, while they appear to have softened in mining, recreation & personal services and retail. Overall, price pressures were strongest in finance/ property/ business and transport & utilities (both 0.4%), while they were softest in manufacturing (-0.2%). Retail prices remain very subdued and appear to have fallen in Q1 2012 – consistent with core inflation readings around ½%. Overall purchase cost pressures eased in March, with growth slowing to 0.3% (at a quarterly rate), down from 0.6% in the previous month. Purchase costs pressures increased solidly in transport & utilities – consistent with the recent rise in petrol prices – while they softened most notably in retail and manufacturing. Purchase costs growth was strongest in transport & utilities (1.5%), construction (1.0%) and finance/ property/ business (0.9%), while it was weakest in manufacturing (-0.5%) and wholesale (-0.4%).

Demand growth to tick down
Forward orders (change & level) as an indicator of domestic demand (6-monthly annualised) 10 8 6 4 2 0 -2 -4 02 03 04 05 06 07 08 09 10 11 12

Domestic demand

Prediction from orders

GDP (ex coal) growth around trend
Business conditions (change & level) as an indicator of GDP (6-monthly annualised) 8

6

4

2

0

-2 02 03 04 05 GDP 06 07 08 09 10 11 12

Prediction from bus conds

Price & cost pressures remain soft overall
Costs & prices (% change at a quarterly rate)
2.5 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 I II III 2009 Labour IV I II III IV I II III IV I 2012 2010 Product price 2011

Retail price

Based on respondent estimates of changes in labour costs and product. Retail prices are based on retail sector product price estimates.

4

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Current business conditions
The business conditions index increased by 1 point to +4 index points in March, consolidating the rises recorded over 2012 to date. The trend conditions index also rose slightly in the month and remains a little above the long-run average level of +1 point.

Trading strongest But profitability improving
All components of business conditions (net bal., s.a.)
20

Trading, profitability and employment
The improvement in business conditions reported in the March survey reflected increases in profitability and employment conditions, while trading conditions remained unchanged at a relatively elevated level. Trading conditions improved very solidly in mining (up 16 to +28 points), more than unwinding a fall in the previous month, followed by finance/ business property (up 5). In contrast, trading conditions deteriorated very heavily in wholesale (down 18 to +1 point) and recreation & personal services (down 11 to +15 points). In trend terms, trading conditions were strongest in mining (+22), recreation & personal services and transport & utilities (both +21), while conditions were again weakest in retail (-17).

10

0

-10

-20

-30

-40 I II III 2009 Trading Conds 1990s recn IV I II III IV I II III IV I 2012 Employment 2010 Profitability 2011

Net balance of respondents who regard last month’s trading / profitability / employment performance as good.

Employment conditions improved considerably in mining (up 23 to +52 points) – highlighting the intensity in mining activity – while they deteriorated moderately in wholesale (down 5 to -5 points) and transport & utilities (down 2). Trend employment conditions were strongest in mining (+34) and transport & utilities (+12), while they were softest in manufacturing (-9) and construction (-8). Profitability improved across all industries in the month, with the exception of recreation & personal services, where it deteriorated solidly, and wholesale, where it was marginally softer. The most notably improvements in profitability were in mining (up 17 to +21 points) and finance/ property/ business (up 11). In trend terms, profitability was strongest in transport & utilities (+18) and recreation & personal services (+16), while it was weakest in retail (-17), construction and manufacturing (both -14). Business conditions components (net balance)
Trading performance
20 20

Profitability
20

Employment

10

10

10

0

0

0

-10

-10

-10

-20

-20

-20

-30 I II III 2010 IV I II III IV I 2012 Trend 2011

-30 I II III 2010 IV I II III IV I 2012 Trend 2011

-30 I II III 2010 IV I II III IV I 2012 Trend 2011

Seasonally adjusted

Seasonally adjusted

Seasonally adjusted

Net balance of respondents reporting trading performance / profitability / employment as good or very good (rather than poor or very poor).

5

Embargoed until 11:30am Tuesday, 10 April 2012

Current business conditions (cont.)
Forward orders
The forward orders index – an indicator of domestic demand – strengthened marginally in March. Seasonally adjusted orders rose by 1 point to -1 index point – in line with its long-run average level. Trend orders also improved marginally to -1 index point. In March, forward orders improved most significantly in manufacturing (up 19 to +11 points) and mining (up 9), while they deteriorated heavily in wholesale and transport & utilities (both down 8). Orders were strongest in mining (+22) and manufacturing (+11), while they were again weakest in retail (-15) and construction (-7), which is consistent with the weakness in activity in these industries.
20

Soft new demand
Forward orders (net balance)

10

0

-10

-20

-30

-40 I II III 2009 IV I II III IV I II III IV I 2012 2010 Seasonally adjusted Orders 1990s recn 2011 Trend

Net balance of respondents with more orders from customers last month.

Capacity utilisation
In March, capacity utilisation ticked up to 81.1%, from 80.6% in February, to be modestly above the series long-run average level (of 80.4% since 1989). Capacity utilisation picked up solidly in mining (up 2.7 ppts to 88.7%) and construction (up 2.1 ppts to 79.5%), while it fell significantly in transport & utilities (down 1.3 ppts to 84%). Mining continued to utilise the most capacity in the month (88.7%); the level of capacity utilisation was also high in wholesale (84.8%). In contrast, utilised capacity was lowest in manufacturing (77.2%), retail (79.2%) and construction (79.5%).
84 83 82 81 80 79 78 77 76 75

Utilised capacity increases
Capacity utilisation (per cent)

I

II

III 2009

IV

I

II

III

IV

I

II

III

IV

I 2012

2010 Seasonally adjusted CapU 1990s recn

2011 Trend

Full capacity is the maximum desirable level of output using existing capital equipment.

Stocks
The stocks index softened to +2 index points in March, down from +4 points in February, although remaining above its long-run average (of +1 point since 1989). Movements in the stocks industry were again divergent in March. The stocks index fell heavily in mining (down 18 to -6 points), wholesale (down 14; unwinding a particularly sharp improvement in the previous month) and retail (down 13). On the other hand, stocks rose solidly in construction (up 16 to -3 points) and transport & utilities (up 13). In trend terms, the stocks index was highest in wholesale (+12) and transport & utilities (+9), while it was lowest (and negative) in construction (-9) and recreation & personal services (-1).
10

Restocking takes a pause
Stocks (net balance)

5

0

-5

-10

-15

-20 I II III 2009 IV I II III IV I II III IV I 2012 2010 Seasonally adjusted 2011 Trend

Net balance of respondents with an increase in stocks last month.

6

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Current business conditions (cont.)
Capital expenditure
Capital expenditure picked up moderately in March (up 2 to +6 points), though it remained well below its recent peak of +11 (reported in November last year). Capex continued to rise solidly in mining (up 16), followed by construction, wholesale (both up 8) and finance/ property/ business (up 7), while it fell to subdued levels in manufacturing (down 9) and retail (down 6). In levels terms, the seasonally adjusted capital expenditure index was highest in mining (+36) and transport & utilities (+33), and lowest in manufacturing (-5) and retail (-3).
Net balance of respondents with an increase in capital expenditure last month.
12

Capex picks up again
Capital expenditure (net balance)

10

8

6

4

2

0 I II III 2010 IV I II 2011 Seasonally adjusted Trend III IV I 2012

Exports
The exports index, which represents export conditions for the economy as a whole, rose solidly, from -3 to zero index points in March – its highest level since July 2011. The pick up in export activity was broad-based across all industries, with the exception of recreation & personal services, where it was unchanged. The most significant strengthening in exports occurred in manufacturing (up 15 to +7 points), possibly helped by the softening in the Australian dollar over March. The exporters’ sales index, which represents export conditions for exporting industries, increased very sharply from -11 to +3 index points.
Net balance of respondents with an increase in export sales last month.
2

Exports improve solidly
Exports (net balance)

0

-2

-4

-6

-8

-10 I II III 2009 IV I II III IV I II III IV I 2012 2010 Seasonally adjusted 2011 Trend

Credit availability
Firms reported that borrowing conditions were slightly easier in March, with the net index (easier minus harder) falling from -7 to -5 index points in the month. This month’s outcome reflected a fall in the proportion of respondents finding it more difficult to obtain finance, only partly offset by a fall in the proportion of respondents finding finance easier to obtain. The proportion of businesses requiring no finance increased sharply, from 50% to 65%, implying significantly less demand for credit.
In terms of the borrowings required for your business in the last month, has it been …
100

Demand for credit diminishes
Borrowing conditions (% of firms)

80

60

40

20

0 IV 2010 More difficult I II 2011 Unchanged Easier III IV I 2012 No borrowing required

7

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Industry sectors
Business confidence Confidence up solidly in mining & construction; recreation & personal sentiment falls

Business confidence levels improved across most industries in March, with the exception of recreation & personal services (down 6), transport & utilities (down 3) and manufacturing (down 1). Confidence picked up strongly in mining (up 11), construction (up 9) and finance/ business/ property. While business confidence in the month improved marginally, trend confidence was lower for all industries, with the exception of finance/ business/ property. Seasonally adjusted confidence was strongest in mining, construction (both +10) and finance/ business/ property (+5), while it was softest in recreation & personal services (-1) and manufacturing (zero). Trend confidence was strongest in construction (+5) and softest in mining (zero). Business confidence by industry (net balance) 3-month moving average
40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Mining IV I II III IV I 2012 Constn 2011 Manuf 40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Retail IV I II III IV I 2012 Transp 2011 Wsale 40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Fin, bus, prop IV I II III IV I 2012 2011

Rec, pers

Business conditions

Mining strongest; retail still the weakest

Business conditions generally strengthened across most industries in the month, with the exception of wholesale and recreation & personal services, where it deteriorated markedly. The most significant improvement in conditions was in mining (up 19 to +36 points), followed by finance/ business/ property (up 9) and transport & utilities (up 5). In seasonally adjusted terms, conditions were strongest in mining (+36) and transport & utilities (+26). Conditions were weakest (for the second consecutive month) in retail (-15), followed by construction (-6), manufacturing (-4) and wholesale (-3). Trend conditions were most favourable in mining (+25), while they were most subdued in retail (-13). Business conditions by industry (net balance) 3-month moving average
40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Mining IV I II III IV I 2012 Constn 2011 Manuf 40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Retail IV I II III IV I 2012 Transp 2011 Wsale 40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Fin, bus, prop IV I II III IV I 2012 2011

Rec, pers

8

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States
Business confidence Confidence still strongest in WA; weakest in Victoria and SA

Of the mainland states, business confidence improved most significantly in Queensland (up 5 to +5 points); the change in government occurred after the survey was conducted but was wildly anticipated. Confidence also strengthened in Victoria (up 3) and NSW (up 1), while it deteriorated sharply in SA (down 9 to -6 points), where it is now weakest, and WA (down 2). Despite a slight dip in the month, trend confidence remained most favourable in WA (+11), followed by NSW (+4), while it was poorest in Victoria (-3) and SA (-1). Trend confidence improved in Tasmania (up 6 to +7 points), although care should be taken when interpreting these data due to small sample size. Business confidence by state (net balance) 3-month moving average
40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Australia IV I II III IV I 2012 VIC 2011 NSW 40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Australia IV I II III IV I 2012 WA 2011 QLD 40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Australia IV I II III IV I 2012 TAS 2011 SA

Business conditions

Conditions strengthen in all states except Queensland and Tassie

Business conditions improved across all mainland states in March, with the exception of Queensland. Conditions in WA surged to their highest level since July 2008 (up 8 to +21), while they also strengthened notably in Victoria (up 5). In trend terms, conditions in the mainland states were by far the strongest in WA (+13), while they were slightly expansionary in NSW (+3) and Victoria (+2). In contrast, conditions were softest in Queensland (-1) and SA (zero). Trend conditions deteriorated heavily in Tasmania (down 10 to -25), although care should be taken when interpreting these data. Business conditions by state (net balance) 3-month moving average
40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Australia IV I II III IV I 2012 VIC 2011 NSW 40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Australia IV I II III IV I 2012 WA 2011 QLD 40 30 20 10 0 -10 -20 -30 -40 I II III 2010 Australia IV I II III IV I 2012 TAS 2011 SA

9

Macroeconomic, Industry & Markets Research
Australia Alan Oster Jacqui Brand Rob Brooker Alexandra Knight Michael Creed Dean Pearson Gerard Burg Robert De Iure Brien McDonald Tom Taylor John Sharma Tony Kelly James Glenn Group Chief Economist Personal Assistant Head of Australian Economics & Commodities Economist – Australia Economist – Agribusiness Head of Industry Analysis Economist – Industry Analysis Economist – Property Economist – Industry Analysis & Risk Metrics Head of International Economics Economist – Sovereign Risk Economist – International Economist – Asia +(61 3) 8634 2927 +(61 3) 8634 2181 +(61 3) 8634 1663 +(61 3) 9208 8035 +(61 3) 8634 3470 +(61 3) 8634 2331 +(61 3) 8634 2788 +(61 3) 8634 4611 +(61 3) 8634 3837 +(61 3) 8634 1883 +(61 3) 8634 4514 +(61 3) 9208 5049 +(61 3) 9208 8129

Global Markets Research - Wholesale Banking Peter Jolly Head of Markets Research Robert Henderson Chief Economist Markets - Australia Spiros Papadopoulos Senior Economist – Markets David de Garis Senior Economist – Markets New Zealand Tony Alexander Stephen Toplis Craig Ebert Doug Steel London Nick Parsons Tom Vosa Gavin Friend Chief Economist – BNZ Head of Research, NZ Senior Economist, NZ Markets Economist, NZ Head of Research, UK/Europe & Global Head of FX Strategy Head of Market Economics – UK/Europe Markets Strategist – UK/Europe Foreign Exchange +800 9295 1100 +800 842 3301 +800 64 642 222 +800 747 4615 +1 800 125 602 +(65) 338 0019

+(61 2) 9237 1406 +(61 2) 9237 1836 +(61 3) 8641 0978 +(61 3) 8641 3045 +(64 4)474 6744 +(64 4) 474 6905 +(64 4) 474 6799 +(64 4) 474 6923 +(44 20) 7710 2993 +(44 20) 7710 1573 +(44 20) 7710 2155 Fixed Interest/Derivatives +(61 2) 9295 1166 +(61 3) 9277 3321 +800 64 644 464 +(44 20) 7796 4761 +1877 377 5480 +(65) 338 1789

Sydney Melbourne Wellington London New York Singapore

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