Australian Economy

Viewing posts in the Australian Economy category

PPI shows lack of inflationary pressures

ScreenHunter_4728 Oct. 31 14.22 By Leith van Onselen The Australian Bureau of Statistics (ABS) today released Producer Price Index (PPI) data for the September quarter, which has registered a 0.2% quarterly increase in final (stage 3) prices and an increase of only 1.2% over the year: The 0.2% increase in final (stage 3) prices was driven primarily by increases in the prices received for building construction (+1.0%), partly offset by falls in the prices received for electricity supply; gas supply; and water supply, sewerage and drainage services (-3.6%) and petroleum refining and petroleum fuel manufacturing...
read more

Australia’s terms-of-trade pounded

ScreenHunter_4694 Oct. 30 12.08 By Leith van Onselen The Australian Bureau of Statistics (ABS) released export and import prices for the September quarter, which portends big falls in Australia's terms-of-trade when the national accounts are released next month. According to the ABS, export prices fell by 3.9% in September quarter and by 9.5% over the year. By contrast, import prices fell by a more moderate 0.8% over the September quarter and by 1.1% over the year (see below table). The fall in export prices were driven by the following factors: This [3.9% quarterly] fall was driven mainly by falls in the prices...
read more

What Robb must cut out of the TPP

ScreenHunter_3418 Jul. 23 10.44 By Leith van Onselen Labor member for Fremantle, Melissa Parke, has posted a fantastic article in The Guardian warning of the dangers to Australia arising from the investor state dispute settlement (ISDS) clause in the Trans-Pacific Partnership (TPP): ISDS clauses enable foreign corporations to sue a host country for laws or policies, or even court decisions, they find inconvenient and objectionable. This has the effect of giving foreign investors more rights than local investors; more influence than local citizens... They were originally created to protect businesses that invested in...
read more

Bloxo: LNG will save us!

url Bloxo tackles the forthcoming LNG volumes boom today: After many years of talking about the impending rise in liquefied natural gas (LNG) exports, 2015 is set to be the year when it all begins. Seven major projects are being built across the country with the earliest (and largest) having commenced construction in 2009 and it is only now that these projects are set to start exporting. New LNG capacity was a key driver of the resources sector investment boom and LNG is now set to be a major driver of export growth over coming years. Given the capacity that has been built, LNG export volumes...
read more

Rupert Murdoch is not captain of ‘Team Australia’

ScreenHunter_3706 Aug. 11 08.55 Cross-posted from The Conversation Rupert Murdoch’s special address to an exclusive meeting of the world’s most powerful finance ministers got a second airing this week. In a breathless front-page “exclusive” in The Australian, Paul Kelly reported that his boss warned the world’s financial grandees their policies were serving to widen the gap between rich and poor, which was leading to social polarisation. Kelly’s article was not an “exclusive” – others had reported the same speech on October 17 – and it was not “news” as the dinner had been held on October 9. While...
read more

“Bullshit jobs” are costing the economy

ScreenHunter_4672 Oct. 29 12.35 By Leith van Onselen Deloitte-Access Economics has released a new report claiming that excessive 'red tape' and compliance is costing the economy some $250 billion in lost productivity, much of which has been brought about by companies' own internal rules. From Peter Martin: Deloitte Access says government regulations cost about $27 billion a year to administer and cost businesses $67 billion a year to comply with. But it says red tape imposed by businesses themselves costs $155 billion a year - $21 billion to develop and administer and $134 billion a year to comply with... "Businesses...
read more

The great oil gouge

Ripped-Off-Again From David Scutt: So far in 2014 the spot price of Tapis crude, priced in Australian Dollar terms, has fallen 26.1%. From the last reported price for 2013, $151.30/l, the average price for fuel in Australia has fallen just 1.1%, even after the recent plunge in crude prices globally. While those who own shares in refiners will be smiling (or at least hedged), it’s clear that someone is is benefiting from widening margins and it’s not Australian motorists! In my experience it takes roughly three weeks for oil price falls to reach the Australian bowser. The chart needs a date axis to judge...
read more

Accountants highlight 457 visa flaws

ScreenHunter_4668 Oct. 29 07.44 By Leith van Onselen Back in July controversy arose after it was revealed that the Abbott Government had chosen to keep accountants on a list of in-demand occupations for skilled migrants, going against the both the Department of Employment's and the Australian Workforce and Productivity Agency's (AWPA) recommendations to remove accounting from this list due to significant labour surpluses and “deteriorating outcomes for graduates . . . relatively low pay rates for bachelor graduates and weak employment outcomes for masters graduates”. It was understood that universities, which derive...
read more

Australia bans travel to Ebola Africa

imgres From Reuters: Australia became the first developed country on Tuesday to shut its borders to citizens of the countries worst-hit by the West African Ebola outbreak, a move those states said stigmatized healthy people and would make it harder to fight the disease. Australia's ban on visas for citizens of Sierra Leone, Liberia and Guinea followed decisions by the U.S. military to quarantine soldiers returning from an Ebola response mission and some U.S. states to isolate aid workers. The United Nations said such measures could discourage vital relief work, making it harder to stop the spread of the...
read more

ANZ-RM consumer confidence bounces

ScreenHunter_4660 Oct. 28 11.47 By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index continues to bounce around, this time recording a rise of 3.0 points (+2.7%) to 114.6 in the week ended 26 October, taking it above its long-run average reading of 113.2 (see next chart). This week's increase was driven by a 10% jump in households’ view of economic conditions over the 12 months to the highest level since mid-April, along with a 3.9% increase in expectations of economic conditions over the next five years. The below chart plots the most recent Westpac-Melbourne Institute Consumer...
read more

When wolves worry for sheep

Capture From Paul Kelly at The Australian: Speaking at the dinner in the Library of Congress building in Washington, Mr Murdoch said... since the 2008 global financial crisis, leaders had made the mistake of responding to the domestic “political outcry” instead of devising long-term structural reforms to restore economic confidence, investment and innovation. ...“Quantitative easing has increased the price of assets, such as stocks and real estate, and that has helped first and foremost those who already have assets. Meanwhile, the lack of any real wage increase for middle-income workers means...
read more

Chep index promises weak Xmas retail

dgqe From Deloitte:   After a pick-up in the growth of the AFGC CHEP Retail Index  earlier this year, growth has been easing in recent months.  Australian Bureau of Statistics data also shows that retail sales  growth (in trend, nominal terms) has slowed from a peak of  5.7% in January 2014 to 5.0% in August 2014. Although growth  in retail sales remains, some of the momentum from earlier in  2014 has been lost. Despite some good signs for the outlook in terms of low interest  rates, a number of factors continue to take their toll on retail  sales. In particular, historically slow wage...
read more

Copyright in the TPP echoes past mistakes

ScreenHunter_3418 Jul. 23 10.44 Cross-posted from The Conversation: Deja vu: last week a new version of the intellectual property (IP) chapter of the Trans-Pacific Partnership (TPP) was leaked. Even as experts try to make sense of 77 pages of complex text, IP negotiators are meeting in Australia this week and next to try to finalise the treaty. Experts have already highlighted some big issues with this IP text. Extensive proposals on patents, clinical test data and the links between patent law and processes for approving pharmaceutical products, if agreed, look like creating barriers to access to medicines in the region....
read more

Robb fails to soothe TPP concerns

ScreenHunter_4649 Oct. 27 10.05 By Leith van Onselen Coalition trade minister, Andrew Robb, has moved to quell concerns over the Trans-Pacific Partnership (TPP) – the proposed regional trade agreement between 12 Pacific Rim countries, including Australia - claiming that it will not sell Australia short, while lashing-out at the deal's opponents. From The Canberra Times: Mr Robb lashed out at consumer groups and the Greens for spreading misinformation about the Trans-Pacific Partnership, before walking into a meeting with 11 trade counterparts in Sydney on Saturday to finalise the "basic elements" of the deal. "Those who...
read more

A flawlessly mismanaged mining boom and bust

b It is amazing to watch as the mismanagement of the mining boom turns to mismanagement of the mining bust. We all know what should have been done many years ago on the way up. Dutch disease is not a mystery. Everyone knows that the currency will rise and rise through a resources boom. The answer to it has been followed very successfully by other nations like Chile and Norway. You set up huge resource rent taxes and push the money offshore into sovereign wealth funds. Not only does it help keep the currency down, it prevents disruptive volatility in fiscal planning, containing spending during the...
read more

Will Australia join the great global deflation?

deflationcycle By Leith van Onselen Dixon Advisory's Max Walsh has written a ripper piece in The AFR today warning about the dangers of pinning an economy on rising housing values and debt, which more often than not lead to a significant downturn and a period of financial instability: If you think you have heard the story of the finance-based, housing-led recovery that was the ideal medicine for an economy under stress, you are correct. A property boom underwritten by high leverage and/or low mortgage entry rates will collapse suddenly, ensuring a slow recovery. In Australia our banks have become little...
read more

China and Australia trade blows

images From the FT: China will officially launch a new $50bn Asia Infrastructure Investment Bank on Friday as it steps up its challenge to global financial institutions like the World Bank that it feels are dominated by America and its allies. But only 20 mostly small economies, many of them effectively client states of China, will become founding members of the bank at Friday’s ceremony in Beijing after Washington lobbied furiously to stop other countries from signing up. ...India will be the only large economy to sign up to the Chinese initiative at the ceremony in the Great Hall of the People in...
read more

Australian CPI in detail

ScreenHunter_01 Jun. 08 23.33 By Leith van Onselen As noted briefly by Houses & Holes, the Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) data for the September quarter 0f 2014, which registered a modest quarterly increase in prices, with the result also coming ahead of economists’ expectations of 0.4% inflation over the quarter. According to the ABS, headline CPI rose by a modest 0.5% in the September quarter, which follows June’s 0.5% rise (see next chart). On an annual basis, headline CPI growth fell to 2.3% from 3.0% in the June quarter, which is well within the...
read more

CPI eases

images The Australian Bureau of Statistics has released the September quarter CPI and inflation is easing at 0.5% (0.4 expected) for the quarter and a tame 2.2% for the year. The analytical series are now easing as well with the trimmed mean at 0.4% and 2.5% and weighted median 0.6% and 2.6%. All figures are down sharply from June QTR growth rates: SEPTEMBER KEY FIGURES Jun Qtr 2014 to Sep Qtr 2014 Sep Qtr 2013 to Sep Qtr 2014 Weighted average of eight capital cities % change % change All groups CPI 0.5 2.3 Food and non-alcoholic...
read more

DEEWR jobs ads show weak labour market

sdfq The Department of Education, Employment and Workplace Relations Job Vacancies index is out for September and has fallen away 0.8 on the month: The trend remains a shallow and vulnerable recovery but vacancies have barely climbed above their GFC low: Falls were widespread: Skilled vacancies were a littler better: This remains an historically lousy jobs market. Full report...
read more

Leading index sinks further

erty3 From Westpac's Bill Evans: The six month annualised deviation from trend growth rate of the Westpac Melbourne Institute Leading Index which indicates the likely pace of economic growth three to nine months into the future fell from –1.07% in August to –1.16% in September. This is the eighth consecutive month where the growth rate in the Index has been below trend. That follows 13 consecutive months to February this year when the growth rate was above trend. The index continues to indicate that we can expect growth in the Australian economy to stay below trend in the final quarter...
read more

China accelerates away from the quarry

fdghe A few extra charts this morning from the CBA commodities team gives an insight into just how fast the Chinese economy is moving way from Australia. Net exports are a new support for growth as imports fall back: Consumption and investment are still stuck together: Fixed asset investment is falling across the board (though infrastructure has been rising): The Li Keqiang index is looking sick:     Power production is galloping away from thermal coal:   And growth in residential floor space under construction is fading fast: As starts...
read more

ANZ-RM consumer confidence dips

ScreenHunter_20 Apr. 10 19.28 By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index fell in the week ended 19 October, falling 2.2 points (-1.9%%) to 111.6, taking it below its long-run average reading of 113.2 (see next chart). The overall fall in consumer confidence was driven by households having a more pessimistic take on their financial situation compared with the previous year and also being more downbeat about the economic outlook for the next five years. ANZ chief economist, Warren Hogan, continues to summon the confidence fairy and wealth effect from rising housing prices, even...
read more

Stokes rightly sees WA headed for 1991 recession

kerry-stokes3 From the SMH comes a blunt assessment from Kerry Stokes that Western Australia is headed for a recession: "They [BHP and Rio] are pretty big smart cats," Mr Stokes said. "Frankly if you can sell something at $80 a tonne that cost you $20 a tonne you might want to sell as much as you can. I understand that. That means everybody else who competes has got to get a whole lot more efficient." ...Mr Stokes offered a blunt assessment of the state's economic climate. "We are in a really tough period," Mr Stokes said. "Probably, this is as tough as I've seen since 1991. People are saying to me how...
read more

The east coast gas crisis is overblown

fgw4g From the Grattan Institute today: For some time the price of natural gas has been rising well above  the cost of living. As with electricity, rising network prices are the  main reason for a 36 per cent increase in average gas bills over  the past five years. But in the next few years, huge changes in the  gas market will push up prices even more sharply, adding more  than $300 a year to the average household gas bill in Melbourne  and over $100 a year in Sydney and Adelaide. The increases will  mean tough decisions for many households and businesses. Natural gas is one of Australia’s main...
read more
Page 1 of 15312345...102030...Last »