No tangible signs of east coast led recovery

No tangible signs of east coast led recovery. Despite the February rate decision by the RBA to take the cash rate to a historic low 2.25%, we continue to see little evidence of an east coast led economic recovery or any tangible sign that a broad based turnaround is imminent. Retail sales remain subdued, the unemployment rate is creeping upward, business spending is on hold and critical infrastructure spending continues to be postponed due to political posturing or government changes at state levels. Our conversations with company management over the reporting season has reinforced our belief that organic earnings growth will be difficult to achieve for most cyclically leveraged, domestically focused businesses over the balance of CY15. Cost out has been the key driver of bottom line growth for many domestically focused companies and most of those programs have almost run their course.