Charting the city-country employment divide

ScreenHunter_4299 Sep. 18 17.04 By Leith van Onselen Yesterday, the Australian Bureau of Statistics (ABS) released its detailed monthly labour force statistics, which includes breakdowns of employment and unemployment across Australia's capital cities and regions. According to this release, the unemployment rate in Australia's capital cities was 5.7% in August in raw terms, down 0.1% from July. By comparison, unemployment in Australia's rural and regional areas was 6.5%, which was unchanged from July. The below chart, which is presented on a rolling 12 month average basis to smooth volatility, illustrates the trends in...
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RP Data weekly Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 18 September 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, fell by 0.11%. It was the third consecutive week of falls (see next chart). Home prices fell in three major capitals and rose in two (see next chart). Values are up down by 0.70% so far in September, again with all major capitals except for Adelaide falling (see next chart). Since the start of the year, home values nationally have risen by 5.47%, with all major capitals except Perth rising (see next...
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Kohler’s housing shit sandwich hits the fan

SHIT-SANDWICH If you get five spare minutes today, make sure you watch the above tirade by Alan Kohler on Australian housing , whereby he cheers on Australian house prices and effectively tells first home buyers to eat shit. While there are many disgraceful quotes in the video, these ones below are perhaps the worst: "[Is it] all that bad if prices are high? Everyone's complaining that Australian houses are overvalued. And I'm saying 'yeah it's bad for first home buyers'... [My kids'] are complaining to me that they can't buy a house cause they are having to rent all the time. Well, actually is that so bad?...
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The death of Australian manufacturing

ScreenHunter_10 Mar. 29 12.46 By Leith van Onselen Following on from my earlier post summarising the latest quarterly employment report from the ABS, below are some charts illustrating the dire situation facing Australia's manufacturing industry. First, total employment in manufacturing fell to the second lowest level ever in August, with only 919,100 Australians employed in the industry - just a whisker above the all-time low 916,900 jobs recorded in May 2013. Moreover, the share of total employment in manufacturing fell to an all-time low of just 7.9% - less than half the 16.8% of total employment in manufacturing in...
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Where are the new jobs and where are they gone?

ScreenHunter_07 Nov. 26 16.13 By Leith van Onselen The Australian Bureau of Statistics (ABS) today released its quarterly labour force report, which breaks-down employment at the industry level. Below are some key charts, which present the changes in employment aggregates on a trend basis. First, the quarterly change in employment by industry: As you can see, science (+21,900) and construction (+13,900) were the big employment gainers over the August quarter, with mining (-13,100) and manufacturing (-11,000) the biggest losers. Public servant jobs also declined by 9,900 over the quarter, possibly reflecting...
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New Zealand income booms

ScreenHunter_4277 Sep. 18 09.51 By Leith van Onselen Statistics New Zealand (Stats NZ) has released national accounts data for the June quarter, which revealed 0.7% growth in real GDP over the quarter and 3.5% growth over the year - the highest rate of growth since the year to September 2007. The growth was largely driven by the services sector: “Services make up about two-thirds of the economy and all 11 services industries increased this quarter,” national accounts manager Gary Dunnet said. “The biggest increases were in industries that include advertising, employment services, and software...
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Will a falling AUD curb the population ponzi?

ScreenHunter_277 Nov. 14 12.57 By Leith van Onselen Rob Burgess has written an interesting post today at Business Spectator, which contends that a falling Australian dollar would curb immigration into Australia by reducing the pay-off from earning Australian dollars and raising living costs: Australia has been a very attractive destination for skilled workers from around the world, including developed nations such as the UK and US. Recruiting in such markets relies on several factors, but key among them is the ‘lifestyle’ that temporary migrants will enjoy and the remuneration paid in sky-high Australian...
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Who’d want to be an engineer right now?

ScreenHunter_05 May. 15 10.45 By Leith van Onselen If I was to pick a skilled occupation to avoid right now, it would be engineering. My Father and brother-in laws are both engineers working in mining-related areas. And through them, I also know a bunch of other engineers. For the past decade I have watched with amazement as their work boomed and huge pay rises flowed as the biggest commodity price and mining investment boom since Federation arrived on our shores. The story today has changed immensely. Engineering design work has all but dried-up. There's still construction and maintenance work, but these too are...
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Links 18 September 2014

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: Why the media loves calls for a market crash - Above the Market The buyback boom is slowing - Pragmatic Capitalism How is the Global Market Index doing? - Capital Spectator Peter Thiel on diversification - Reading the Markets North America: Key measures show low inflation - Calculated Risk Fed renews zero rate pledge, but hints at steeper rate hike path - Reuters Fed keeps ‘considerable time’ guidance - Financial Times Business Cycle Index points towards steady growth - The Big Picture U.S. considering options if oil export ban...
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Netflix enters Australia with exclusive rights deal

ScreenHunter_4272 Sep. 17 14.43 By Leith van Onselen Fairfax is reporting today that Netflix is poised to enter the Australian streaming market, locking-up an exclusive deal to screen the new TV series Gotham: Providing the biggest hint yet that Netflix is preparing to launch locally, the US-based company has secured exclusive Australian subscription video on-demand rights to the highly anticipated superhero television series Gotham... By acquiring subscription video on-demand (SVOD) rights from Time Warner's Warner Bros, Netflix is giving its biggest sign yet that it intends to launch in Australia. Nine Entertainment...
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A free economics lesson on bubbles for Hockey and Costello (and Kohler)

ScreenHunter_4271 Sep. 17 13.24 By Leith van Onselen As H&H has pointed out, Former Treasurer Peter Costello, made some good points today about the challenges ahead for the economy and property but he also backed-up Joe Hockey's poor effort yesterday, claiming that there is no housing bubble because there is a shortage of supply. From The AFR: “For a western developed country, Australia’s population growth is very strong,” Mr Costello said. “So we have to factor that housing supply is not meeting demand. It’s important the public understands this”... “If you speak to anyone outside Australia as I do, they...
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SQM forecasts ongoing strong Sydney house price growth

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen SQM Research has today released its latest housing "boom and bust" report for 2014-15, which predicts ongoing strong growth in Sydney, whereby prices are predicted to grow by between 8% and 12% over the 2014-15 financial year, and by 5% to 9% across the capital cities, with all of the major capitals forecast to record positive growth (see below table). According to Louis Christopher: “The market is somewhat overvalued but not by as much as what some have very publicly stated. I don’t believe at this stage the market is in a bubble. Some cities are heading into...
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Bank internal capital models under APRA spotlight

ScreenHunter_06 Jun. 26 22.42 By Martin North, cross-posted from the Digital Finance Analytics Blog In an important speech given today by Wayne Byres, Chairman of APRA, “Perspectives on the Global Regulatory Agenda”, there are some important pointers which indicate to me that we should expect some changes to the capital regulatory framework quite soon. We highlighted the capital questions recently. Whilst talking about the global agenda, he did confirm the Financial System Inquiry (FSI) view that local and global cannot be separated. Whilst Basel III was focusing on systemically important banks, the current agenda is...
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8 years without a FIRB foreign prosecution

ScreenHunter_3949 Sep. 02 08.10 By Leith van Onselen Following on from Houses & Holes' quick post yesterday, ABC's The Business last night aired a segment (above) featuring Liberal MP, Kelly O'Dwyer, slamming the inept failure of FIRB to police or prosecute foreign investors that flaunt Australia's property investment rules, specifically: Rules precluding non-residents from purchasing pre-existing dwellings; and The requirement that a foreign temporary resident sells their home within three months of departing Australia. O'Dwyer is particularly scathing of the fact that FIRB has failed to prosecute anyone in eight...
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Melbourne facing “sub-prime” apartment risk

ScreenHunter_07 Feb. 10 11.46 By Leith van Onselen The AFR is out today citing BIS Shrapnel analysis claiming that Melbourne is facing a sub-prime crisis in the apartment market as a growing over-supply clashes with falling rents: “I worry that if we keep building apartments in the same location, of the same type, for too much longer, we are going to see a case of sub-prime building,” BIS Shrapnel associate director Kim Hawtrey told delegates at its September Melbourne forecasting conference... “Sub-prime building means we are over-building in areas or in demographic cohorts that lack the numbers to occupy those...
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SQM: Perth leads rental market stall

ScreenHunter_07 Jul. 17 21.09 By Leith van Onselen SQM Research has released its rental market report for August, which revealed a slight rise in the number of vacancies but a stable rental vacancy rate of 2.3% (see below table). The rental vacancy rate was 0.2% higher than August 2013, with all jurisdiction registering either an increase or no change over the year. According to SQM: This result reflects comments that SQM Research has made in recent months, that the rental market remains sluggish, with tenants enjoying the shift in the balance of power as vacancies continue to gradually increase... Louis...
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Immigration policy sells-out local accountants

ScreenHunter_4248 Sep. 17 07.26 By Leith van Onselen The AFR has published an article today on the jump in overseas students studying accounting, which has driven local students from the field: A 40 per cent jump in new overseas postgraduate accounting students in 2013 was the sole driving force in the critical tertiary accounting education market, as local students continued to shun the field. International students now ­dominate accounting courses, making up a record 79 per cent of the 17,600 enrolled postgraduate students in 2013, according to data from the federal Department of Education. At the undergraduate...
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Links 17 September 2014

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: Replaying the 30s in Slow Motion - New York Times Fixing Climate Change May Add No Costs, Report Says - New York Times Buy-backs helping to buoy market -  Wall Street Journal The big flaw in share buybacks - The Economist Be careful with historical market returns - Pragmatic Capitalism Is this the beginning of the end of the hedge fund gravy train? - Abnormal Returns Investing against the odds and facts - Bucks Blog How to cultivate trading intuition - TraderFeed Small caps continue to lag - Crossing Wall Street Searching for deep value...
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Competition policy tsars slam online piracy crackdown

imgres By Leith van Onselen Two senior competition policy tsars - former ACCC head, Alan Fels, and former chair of the 1999 Australian Intellectual Property and Competition Review Committee, Henry Ergas, have lodged a joint submission to the Government warning that Australians would likely pay more to legally download music and movies, with the bulk of the revenue flowing offshore, if the Government's proposed measures to prevent online piracy are implemented, while also warning that the costs of the measures "greatly exceed their benefits": The report finds that the implications of the Government’s...
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WA mining and resources jobs crash

ScreenHunter_03 Jul. 23 09.31 By Leith van Onselen DFP Recruitment has released its mining and resources jobs index, which registered a 5.4% fall in August - the fourth consecutive monthly fall - with the index also down 9.9% over the quarter and by 34% over the year. Western Australia has also led the decline: The rate of decline seen over the past 12 months is concerning for all engaged within the industry. The iron ore price has recently hit 5 year lows exposing a number of the higher cost producers and we are continuing to see deeper cost cutting measures introduced. The repeal of the mining tax has been well...
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Super fee gouge rolls on

ScreenHunter_2952 Jun. 24 12.41 By Leith van Onselen There are arguably few better businesses to be in than Australian superannuation. Thanks to compulsory contributions, set at 9.5% of employee wages currently, along with a largely fixed cost structure, the superannuation industry continues to rake it in, earning fat fees on everyone's retirement nest egg. Last night, ABC's The Business aired an interesting segment revealing that Australians paid super funds $20 billion in fees last year, up 8% and equating to around $2,000 per member. It wasn't all bad news, however, with average management fees declining, courtesy...
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Youth underemployment rockets to all time highs

ScreenHunter_3946 Sep. 01 12.43 By Leith van Onselen Following last week's labour force figures for August, I posted an article showing that unemployment for Australians aged between 15 and 24 had risen to 13.8% in trend terms - the highest youth unemployment rate since November 2001 (see next chart). I also showed that total employment growth for those aged 15-24 years of age has been more or less negative since the Global Financial Crisis (GFC), whilst the rest of the labour force has experienced positive growth (see next chart). With full-time jobs having been hit particularly hard, partly offset by an...
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ANZ-RM consumer confidence falls below average

ScreenHunter_20 Apr. 10 19.28 By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index fell in the week ended 14 September, down 2.0 points (1.7%) to 111.3, taking it too the lowest level in five weeks and below its long-run average reading of 113.2 (see next chart). This week's fall was driven by “declines in ‘time to buy a major household item’ (-5.1%) and ‘financial situation compared to a year ago’ (-3.7%)”. The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the ANZ-RM Consumer Confidence index: As you can see, the mood...
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“Mad Adam” on the income boom!

imgres "Mad" Adam Carr has once again entered bizarro world today with another post lashing "doomsayers"for being concerned about Australia's falling national income growth and soggy outlook: What could drive such an emotionally charged dystopian view of the economy? The main culprit is the mistaken view that national income is falling, driven by the slump in the terms of trade. It lies at the heart of this doomsday cult that seems to be running Australia and it stands behind the constant call to slash wages and cut the exchange rate. Presumably because the only way to lift national income is by cutting...
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Why raising education levels pays big dividends

ScreenHunter_26 Oct. 16 10.41 By Leith van Onselen The OECD has released its latest Education at a Glance Report, which contains some very interesting benchmarking data on education-related matters. Below are some of the key charts from the report, which basically show that education is a great investment from both a private and public perspective. First, consider the proportion of the working age population that attained tertiary education in 2012 versus 2000. As you can see, Australia ranks well on this measure, easily beating the OECD average and achieving a big lift in educational attainment over the 12-year...
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