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Local chambers embraced

SMALL businesses in the metropolitan area have been embracing the Local Chambers that started three years ago following a split with the WA Chamber of Commerce after a number of members felt the WA organisation was losing touch with the smaller end of town.

In the past year, membership has grown by 127 to more than 400 members. The South East Metropolitan Chambers of Commerce, broken up into two separate chambers, the Armadale Chamber of Commerce and Industry and the Gosnells Chamber of Commerce and Industry, also joined the Local Chambers during the year.

The increase in business interest was also reflected on its books released last week at the Chambers Annual General Meeting. The chamber has turned a loss in 1999 to a $61,400 net profit for the past financial year, more than double from the previous year. Membership revenue in the year grew from $108,000 to $111,222, sponsorship increased by more than $10,000 while function revenue grew more than $20,000 to almost $100,000.

Not all bad news in slump

ANZ Bank chief economist Saul Eslake says the general downswing in world economies began well before September 11 and represents the first synchronised downswing since the 1980s.

The fall began in 1999-2000, with a doubling in oil prices, interest rate hikes, increasing household debt and the bursting of the technology and communications sector bubbles. The combined effect produces the most challenging set of circumstances in regards to competition and pressure on prices in two decades, against a new background of possible further attempts to disrupt life and business in the US.

However, Mr Eslake says Australia is better placed to cope with all the shocks than in previous global recessions, mainly because Australia’s economy has been unusually non-aligned with the US and the rest of the world during 2000 and 2001.

Australia’s economy slowed during 2000, while the world economy grew at the fastest rate since 1989, and this year, Australia’s economy has grown positively from an upturn in the housing sector, against a marked worldwide downturn.

Other factors which strengthen Australia’s economic position include the gross under-valuation of the Australian dollar, Mr Eslake says, a stark contrast against its alignment with other major currencies at the start of the past three global recessions.

Australia’s interest rates are at historic lows and Australian households are also faring better than those in the US and Europe, having suffered less from recent sharemarket losses. Hence the adverse effects on consumer spending should be less pronounced. Australian investors and exporters have also been less exposed to falls in the information technology cycle.

Mr Eslake predicts Australian economic growth will slow rapidly in the near-term, in response to recession in major world economies, but will not itself slide into recession, and the Australian dollar will remain undervalued for some time.

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