News: Leighton Holdings' Half Year Report - David, page-4

re: News: Leighton Holdings’ Half Year Report... Outlook for the Full Year
For the 2010/11 financial year the Group expects to report
full year revenue of almost $20 billion and net profit after
tax of around $480 million. The final result and full year
dividend are however subject to market and operating
conditions, including weather condition in Australia and
overseas, for the remainder of this financial year.
Long-Term Outlook
Markets and Outlook
The Australian economy performed well for most of 2010,
but declined towards year end resulting in lower real GDP
growth estimates of around 2.6% for the year. The outlook
for 2011 remains positive, with GDP growth of 3% or higher
generally expected. The recent cyclone and floods in
Queensland will have a negative economic effect in the first
quarter of 2011, but thereafter, the rebuilding, clean-up and
repair activities will be a positive for the economy.
However, funding for major infrastructure projects may be
delayed or diverted to reconstruction programs.
Meanwhile, strong demand for commodities, notably from
China and India, continues to support robust capital
investment and positive growth in Australian economic
output. The current unemployment rate of around 5% is
lower than a year ago and well below other advanced
economies. Unemployment is expected to continue falling
in 2011, trending down towards 4% by early 2012, a 37-
year low. The Federal Government recently relaxed
restrictions around the 457 Visa program that should ease
pressure on sourcing skilled labour. Inflation is currently
within the RBA target range at below 3% per annum.
The world economy is forecast to continue growing solidly
during 2011. Global equity markets continue to rise, bank
lending conditions have become less tight and the volume
of world trade has returned to pre-crisis levels. Growth in
private sector demand is strengthening and is well
positioned to take up the slack left by a gradual removal of
Government stimulus programs.
World economic growth will continue to be led by the
emerging markets. The IMF is forecasting 6.5% growth in
emerging and developing economies in 2011, compared
with 2.5% growth in the advanced economies. Whilst some
uncertainty remains for nations suffering high sovereign
debt positions, the general consensus is that the global
economy will expand at around 4 % in 2011.
In accordance with the overall economic outlook, the global
construction market is expected to grow solidly in 2011
after a period of decline following the global financial crisis.
Australia remains the Group?s predominant earnings base,
however, we are well positioned to access the strong
growth prospects of Asia and emerging markets. The
Group is also exploring contract mining opportunities in
parts of Africa on a limited basis.