More interest rate cuts may be on the cards after all
Worse-than-expected manufacturing statistics may force the Reserve Bank of Australia (RBA) to lower interest rates even further.
The latest Westpac-Australian Chamber of Commerce and Industry survey has indicated that the sector is struggling to cope with the high value of the Aussie dollar.
It is also being blighted by the weak global economic climate and a lack of activity in the domestic housing market.
The index was largely unchanged for June, but it was still under the 50 point mark, which generally signals contraction in the manufacturing industry, rather than expansion.
It is unclear whether the results will prompt the RBA to make further cuts to the national cash rate, but it is a possibility.
The central bank published the minutes to its latest meeting at the start of the month earlier this week and they suggested that the 25-point rate reduction made in June was a tough decision. They also hinted that this would be the last cut for a few months, but this was before the manufacturing data was compiled.
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