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UPDATE 1-Australia Q2 wages, sales falter amid first recession in 30 years

Published 31/08/2020, 12:48 pm

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SYDNEY, Aug 31 (Reuters) - Australian businesses reported a decline in second-quarter sales and wages on Monday, with the services sector particularly hit hard by the coronavirus-driven lockdowns, largely confirming the country's first recession in three decades.

Data from the Australian Bureau of Statistics (ABS) showed wages slid 3.3% in the three months to June, an indication of massive job losses in that period. It was the first fall in nearly four years and the largest since records began in 2001.

Figures showed sales of goods & services in the manufacturing sector dived 8.6% during the quarter. In the restaurant and accommodation category, sales plunged 39.1%, showing the effects of entire sectors of the economy sliding into a lockdown.

Australia is facing its deepest contraction in a century. A median of 17 economists polled by Reuters last week predicted second-quarter gross domestic product, due on Wednesday, would shrink 6% from the March quarter, when growth contracted by 0.3%.

Monday's data showed second-quarter business inventories fell 3% to be a drag on GDP.

However, in a surprising outcome, gross company profits jumped 15% in the period, confounding expectations for a 7.5% decline, largely helped by government subsidies.

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